Do I Need An EIN If I Work From Home?

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Many small business owners have the luxury of working from home. In fact, more than 50 percent of small companies are home based. But even if you do not have a brick-and-mortar location for your business, that doesn’t mean that you don’t need an employer identification number for tax-related purposes.

What Is an EIN?

This set of nine unique numbers is assigned to your small company by the Internal Revenue Service (IRS). It identifies your company as a tax-paying entity within the United States and enables you to do a variety of tax-related tasks, such as opening a bank account for your business and filing taxes come April.

How to Get an EIN

IRS EIN makes it easy to get an employer identification number for your company. You can send out your application within minutes and even receive your EIN on the same day you applied for it. You can also easily check the status of an EIN online, right from the comfort of your own home.

EIN Requirements

Even if your company is based out of your home, you may need to obtain an EIN if you:

  • Operate your company as a partnership
  • Operate your company as a corporation
  • Have employees
  • File tax returns for excise, employment, alcohol, tobacco, or firearms
  • Withhold income taxes, besides wages, paid to non-resident aliens
  • Are part of a Keogh plan
  • Are involved with trusts, estates, farmers’ cooperatives, plan administrators, or real estate mortgage investment companies

So, as the list above details, there are clear cases when you are required to have an EIN. That’s nothing to be alarmed about. In fact, as noted, getting an EIN is a quick, simple process when you do your tax work at

Let’s go into more detail, though, for those of you who work from home. The flip side of the equation is that, if you work for yourself and are your only employee, you are not required to get a new EIN, plain and simple. You are free to use your social security number for all of your business, banking and tax matters if you so choose. Nonetheless, there are advantages to having a separate EIN when you work from home.

The Benefits

First, getting an EIN for your work-related matters can be beneficial because it allows you to keep your personal and business affairs separate. This can come in handy when you are doing your taxes.

There is also a matter of security. Today, identity theft is a growing problem, as online predators thrive on stealing personal data from people and committing tax, or other, fraud. As a freelancer, you may be sharing personal information, such as your social security number, with many people and businesses. Certainly, most are reputable and take steps to safeguard your identity. Not all are so diligent, however. Consequently, more and more people are experiencing some sort of identity theft, whether related to taxes, citizenship or financial matters. Having your own EIN short-circuits any such potential problems.

Ultimately, if you work from home, alone, it is your decision. However, it should be reassuring that if and when you choose to file for a separate EIN, you can do so easily on our website and receive it via email most likely within an hour.

If you have further concerns with your EIN, IRS EIN will be more than glad to help you. Contact us today to learn more.

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