You Need an EIN, Like Yesterday
It’s officially 2020! We’re wrapping 2019 and getting ready to rock 2020! On top of making sure my clients have all the reports that they need to review their year and file their taxes, one of the things I do every January is to help my clients file their 1099s. And every year I’m amazed at the number of people who are handing out their social security numbers to strangers on the internet.
In particular, I had a client who needed to file seven 1099s. Of those seven, only one business owner had an EIN or Employer Identification Number. That means I saw six people’s social security numbers, six people who probably never expected that I would see their social security numbers. They were hired by my client, they have no idea who I am and no chance to vet me. Now, obviously, I’m not doing anything with these numbers other than filing a 1099, but they don’t know that. In the world of online business, you really have no idea who you are working with.
Hopefully, we’re all working with the best, most upstanding clients the world has ever seen, and those clients are properly vetting the people they hire. But it’s the internet, it’s so easy to portray one thing and be another.
You are required to provide a W-9 to any client who has paid you more than $600 (and not through a payment processor, see this article on who gets a 1099). Sometimes you may not realize your client is a psycho until you’re over $600 in (don’t worry my current clients, I wouldn’t describe any of you as psycho).
You have to protect yourself, protect your identity. Get an EIN and only hand that out. Even if you’re not required by the IRS to get one for tax purposes you still need one! EINs are free and take like 5 minutes to get.
Do it, do it now.
Bookkeeping seem complicated?
You know bookkeeping is vital to the success of your business. Stop procrastinating and start getting it done with this simple checklist. You’ll get:
- A list of exactly what tasks you need to do each week, month, quarter, and year so you can stay on track.
- Tax due date reminders so you stay on the IRS’s good side
- All the satisfying checkboxes so you can finally mark bookkeeping off your to do list
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