Employer Identification Number

Cason

I'm in the process of selling some photos for a magazine. :clap

During communication, they stated that they would need my EIN for their bubsiness tax purposes. Well, when I obtained a business license, my EIN is my Social Security Number.

What can I do to get around this situation. Can I apply for an EIN that is not my SSN?

I'm just paranoid about giving out my SSN. Am I making a big deal?

Icebear

Ein/ssan
Yeah, you're making a big deal. What they're really asking you for is your TIN, or Taxpayer Identification Number. The TIN is either your EIN or SSAN, or if you are an alien, inelegible for an SSAN, your ITIN. You don't have need of an EIN, which is an "employer identification number." Your SSAN serves the same purpose, and this is exactly the type of use to which the SSAN is supposed to be put. It identifies you to the IRS. The business is getting the info they need in order to send you a 1099 form for "non-employee compensation." The 1099 Form requires the payor to supply the payee's "identification number". No gettin' around it if you want them to pay you. They have to report the income on a 1099 if they pay you over $600 in a year. (That figure may be out of date)

Angelo

the beauty of selling through a third-party, like smugmug, means you wouldn't have to deal with any such nonsense

mike_k

You can always apply for an EIN and start using that instead of your SSN. You can apply online (do a search on IRS.GOV, or I can find the link if you want) and get a number right then and there. No cost.

zacker

didnt i have to send a 1099 form or something to smug mug? its been so long i forget what i did but i know i had to fill out a form and fax it to them.

Cason

mike_k wrote:

You can always apply for an EIN and start using that instead of your SSN. You can apply online (do a search on IRS.GOV, or I can find the link if you want) and get a number right then and there. No cost.

That is what I will do.

I think this is it...

http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

Angelo

I'll reiterate that if you're using smugmug and that's where your client is purchasing images you will not need an EIN (Federal TAX ID)

if that is not the case you should check here

Cason

Angelo wrote:

I'll reiterate that if you're using smugmug and that's where your client is purchasing images you will not need an EIN (Federal TAX ID)

if that is not the case you should check here

They should have another question on there that asks, "Do you want to keep your SSN private and not give it out because you are paranoid?"

I do use Smugmug. However, I do not have it setup in my model for clients to purchase at this time.

If I use Smugmug to sell photos to a business, will they not need my TIN for their tax purposes?

OffTopic

They require your TIN/EIN because the business is required to file a 1099-MISC to the IRS for payments made to contractors/vendors. There is a dollar amount that triggers it, used to be $600 but I'd have to see if that is still current. Basically, it's reported income that you can't hide from the IRS because it's matched up with you the same way your W-2 is if you work as an employee.

If you don't provide your correct TIN, you would be subject to backup withholding.

While Angelo is sortof correct that if they purchase through SmugMug you wouldn't probably wouldn't have to provide your TIN to them directly (although I'll have to check how they report the paymen then), you do have to provide your TIN to SmugMug via the W-9 before SmugMug will pay you.

This is another good reason to consider incorporating if you are going to have a lot of this type of transaction.

Edited to add - a corporation is a separate legal entity, and as such has it's own TIN.

Angelo

RTP wrote:

If I use Smugmug to sell photos to a business, will they not need my TIN for their tax purposes?

No because they would be essentially making a retail purchase.

Angelo

OffTopic wrote:

They require your TIN/EIN because the business is required to file a 1099-MISC to the IRS for payments made to contractors/vendors. There is a dollar amount that triggers it, used to be $600 but I'd have to see if that is still current. Basically, it's reported income that you can't hide from the IRS because it's matched up with you the same way your W-2 is if you work as an employee.

If you don't provide your correct TIN, you would be subject to backup withholding.

While Angelo is sortof correct that if they purchase through SmugMug you wouldn't probably wouldn't have to provide your TIN to them directly (although I'll have to check how they report the paymen then), you do have to provide your TIN to SmugMug via the W-9 before SmugMug will pay you.

This is another good reason to consider incorporating if you are going to have a lot of this type of transaction.

Edited to add - a corporation is a separate legal entity, and as such has it's own TIN.

I'm not sort of correct, I'm 100% correct. If they make their print purchases through Smugmug they are not making any sort of payment directly to the photographer. It's no different than any retail purchase.

Additionally, if you are established as a business entity to sell merchandise, be they photos, baskets or refrigerators and you issue invoices for the sale of that merchandise and no other fees are paid to you for labor or services, there isn't really a reason for them to issue a 1099.

Andy

RTP wrote:

If I use Smugmug to sell photos to a business, will they not need my TIN for their tax purposes?

Yes we will

http://www.smugmug.com/help/reporting

OffTopic

Are they just purchasing photos you have already taken, or are you taking photos specifically for them? That's where the difference is - if they are purchasing photos you've already taken and have up for sale it is a retail purchase and Angelo is correct.

They are treating you as a contractor/vendor providing a service - they have hired you to take photographs specifically for their use. Is that not accurate?

Bleh - I shouldn't mess around at the computer when I'm in the middle of cooking dinner - I don't think straight. Strike all previous.

Are you selling prints to hang on a wall (a retail sale) or selling a license/right to use/publish the images?

mike_k

What it comes down to is you need to provide your SSN or EIN to SmugMug. You'll need to provide either to the bank if you want to open a bank account. If you ever do business directly for a client, you might have to provide either. Either will work.

To me, there are two basic reasons to get an EIN (assuming you're not incorporated in any way) 1) You want to hide your SSN as much as possible and/or 2) There is a chance that you might hire an employee of some sort down the road.

The EIN process is fast and free. Think big - maybe in 6 months you'll need to hire a part-time assistant to help out. I don't really see any reason not to get/use an EIN.

Cason

OffTopic wrote:

Are they just purchasing photos you have already taken, or are you taking photos specifically for them?

...

Are you selling prints to hang on a wall (a retail sale) or selling a license/right to use/publish the images?

I will be selling photos to a magazine publication...(Right to publish)

Andy wrote:

Yes we will



http://www.smugmug.com/help/reporting

When I said they, I meant the magazine company. I already filled out the form for Smugmug.