Benefits of Using an EIN as a Sole Proprietor
- An EIN can help protect your identity and make you seem more professional to others
- Obtaining an EIN allows sole proprietors to hire employees, open retirement accounts, and separate personal and business finances
- More business opportunities become available with an EIN
Reasons to Consider Using an EIN Instead of Your Social Security Number
- Avoid using your Social Security number, keeping it more private
- Distinguish business intentions from personal finances and separate business and personal finances
- Become eligible for more business activities like hiring employees and retirement accounts
Identifying as an Independent Contractor Using an EIN
Using an EIN, sole proprietors can identify themselves as independent contractors and reach out to more potential clients. This helps clients maintain employee classification on paper and enhances your services pitch.
Now that you’re acquainted with the benefits of getting an EIN for your sole proprietorship, you must understand how to get one. The process of getting an EIN through the IRS website is quick and easy.