TIN for Sole Proprietorship
Protecting Professional Identity Online with Tax Identity Number (TIN) for 1099’s
This section probably belongs in the intermediate to advanced part of our programs, but considering the importance of protecting your identity online, we recommend to all writers, bloggers, and publishers that they should establish a tax identity number with the IRS (sometimes referred to as a TIN, or EIN -> Employer Identification Number).
When you begin to do business online, there are two basic ways to establish:
- You can work as a contractor and utilize your social security number for tax purposes, or
- You can establish a business, setting up the business with a tax identification number from the IRS
This is not a choice we can make for you nor dictate to you, but the reason why we recommend your consideration of the second approach hinges on keeping your social security number safe.
If you establish a ’sole proprietorship’, a ‘limited liability company’, a ‘limited liability partnership’, a ‘S Corporation’ or a ‘Corporation’ you will need to establish a taxpayer identification number for that entity.
Establishing a sole proprietorship is the easiest approach, although there are significant tax and legal reasons to consider the other options.
If you determine that you are going to operate your own business working as a publisher of your own online publication, you could establish yourself as a sole proprietor (sole owner) of your business right now, fill out the online application with the IRS in minutes, and have an official TIN number shortly there after (it can take up to 2 weeks, before the number could be used to file your taxes).
Once you have a TIN number, if your company engages to work with other companies online, you will provide your TIN number for tax identification reasons sometimes in an online form and sometimes you will be asked to submit a W-9(download copy of W9 form from IRS).
If your company earns an amount over the minimum amount for the year, your company will then receive a 1099 with an earning report linked to your TIN number, which you will then be able to report on your taxes in Schedule C.
This protects your social security number, so that you do not have to enter it online as you engage to do business with other companies (standard in many online contracts).
Plus, as you begin to organize and run your own business, you will rapidly find a large number of benefits to the write offs and tax deductions of legitimate business expenses that you will incur in the course of doing business, which can include but will not likely be limited to:
- Your monthly internet expenses
- your business phone and fax expenses
- business related purchases of computers, hardware, software, online services and accounts
- business related travel, meals, entertainment expenses and much more
We do recommend that you consult with a tax consultant and an attorney if and when you establish your business, but that may not preclude you from making the choice to protect your identity now.
The IRS Online application is available during the following hours:
- Monday – Friday 6:00 a.m. to 12:30 a.m. Eastern time
- Saturday 6:00 a.m. to 9:00 p.m. Eastern time
- Sunday 7:00 p.m. to 12:00 a.m. Eastern time
Personal Disclosure
As an educated and trained accountant with a double major with accounting and finance and a master’s in law in international taxation, I use the methodology myself. I also utilize H&R Block (formerly called Tax Cut) and Quickbooks or Quickbooks Online (web version) for my own bookwork. Plus, I find PayPal Invoicing service to be invaluable. 
This is not an endorsement, just a statement of what I use. I used to use Quicken and TurboTax, but not for several years.
