How to apply for an EIN
How to apply for an EIN
GoShare recommends that all independent contractors using our platform apply for and obtain an EIN or Employer Identification Number. This number is required for any contractors in California applying to use the GoShare app to find local projects.
If you don’t have one, don’t worry. It only takes a few minutes to get an EIN and they are free. Learn more by reading our step-by-step guide below.
What is an EIN?
An EIN is also known as a Federal Tax Identification Number and is used to identify your business entity. You will use this number when filing taxes for income generated through your business.
Is an EIN required?
Some types of businesses are required to have an EIN by the IRS for tax purposes. Those include:
- Any type of business entity that has employees, including sole proprietors
- Corporations or any entity taxed as a corporation
- LLCs with multiple members
- Someone who has purchased or inherited a business
- A business with a Keogh plan or sol 401(k) retirement plan
- Any business entity filing for bankruptcy
GoShare strongly recommends that independent contractors working through our platform have an EIN. However, it is not required unless you live in California. GoShare requires all California contractors to provide an EIN.
Benefits of having an EIN
Even if they are not required to have one by the IRS, many freelancers and independent contractors still apply for an EIN. There are many benefits to having this identifier.
- Decreased risk of audit – You are less likely to be audited for business deductions, such as home office expenses.
- Identity protection – Having an EIN separates your personal and business finances, meaning you don’t have to provide your Social Security Number to clients or vendors with which you do business. Instead, you provide your EIN. This means, if their system is compromised or hacked, your social security number isn’t disclosed.
- Easier loan applications – If you ever need to apply for a loan, for example buying new equipment for your moving and delivery business, having an EIN can speed up the process.
How to apply for an EIN
The easiest way to apply for an EIN is online, through the IRS website. The process only takes three to five minutes, and you will get your number within moments of completing the application. This application is free, and there is no cost to you.
Step 1 – Start your online application
To get started, visit the IRS EIN Assistant website.
Read the information provided by the IRS, including any restrictions. When you are ready to begin your application, press the “Begin Application” button.
Step 2 – Choose your business structure
Select the correct legal structure for your business. Most of the contractors that work for GoShare are Sole Proprietors. You may also select Partnerships, Corporations, or LLCs if that applies to you.
The remainder of this guide focuses on the application for sole proprietors, but will still be helpful for other business types as a general overview.
Step 3 – Reconfirm selection
If you select Sole Proprietor, you will be asked to reaffirm that that is your business type. If you are working with GoShare, you are not applying for an EIN to hire household workers. So, select Sole Proprietor again.
Step 4 – Select why you are applying for an EIN.
Select the reason you are applying for an EIN. You will likely select “started a new business.” Even if your business has been operational for some time, this is the best option unless you specifically meet the criteria of the other selections.
Step 5 – Provide personal information.
Provide your name and social security number (SSN). International applicants should provide a Taxpayer Identification Number (TIN). Your SSN or TIN is required for this form.
Select “I am the sole proprietor” as you are applying for an EIN for your business, and not someone else’s.
When you submit this information, the IRS will validate the content you provided. If you have made a mistake in typing in your name, SSN, or TIN, your application will be rejected. However, you may simply start again by clicking “Apply for New EIN” at the top right of the screen.
Step 6 – Provide your address.
Provide the physical address information for your business. As a sole proprietor, this may be your home address. If you have mail delivered to a different location, such as a PO Box, there is an option to provide this information as well.
The system will check your address against the post office’s address standardization database. This is to ensure the address is provided in a standard format. If may suggest an update, for example, changing “street” to the abbreviation “st”. So long as your address remains correct, you can accept these standardization changes.
Step 7 – Provide your business name.
Provide the name of your business. As a sole proprietor, you may use your own name.
If you are doing business under another name, such as My Moving and Delivery Company, you may use that. Please be aware that some states require you to file legal documentation to register your business name if it is different than your own given name. If you have not filed a DBA, or “Doing Business As” for your company, you should use your own given name.
If you have an LLC, your business name was registered when you created the LLC.
Do not type GoShare into this form, or use the GoShare brand here. This is for your personal business.
You will also provide the start date of your business, which could be the month you apply, or whenever you began your moving and delivery contracting work.
Confirm your information and submit it to the IRS. You will be provided with an EIN within a few moments. You should provide this EIN on your W9 when you work as a contractor for hire, including through GoShare.
If you found this information useful, these additional articles on the topic of small businesses and independent contractors may also be helpful.
- Tax Tips for Gig Workers in 2020
- Gig Worker Tax Advice from CPAs and Experts
- Best Apps for Gig Workers Tracking Expenses and Mileage
- How To Start Your Own Delivery Business
- Advice for Small Businesses in 2020
- Tips For Independent Contractor Taxes in The Sharing Economy
- Does My Vehicle Qualify for GoShare?
- Top 10 High Paying Side Jobs in 2020
- Proof of Independently Established Trade in California
GoShare Inc. and our affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.