Page 12 - Small Business Taxes

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Social security number (SSN). Generally, use your these payments (the payee) a statement showing the total
SSN as your TIN. You must put this number on each of amount paid during the year. You must include the
your individual income tax forms, such as Form 1040 and payee's identification number and your identification num-
its schedules. ber on the returns and statements.
To apply for an SSN, use Form SS-5, Application for a
Social Security Card. This form is available at Social Se- Employee. If you have employees, you must get an
curity Administration (SSA) offices or by calling SSN from each of them. Record the name and SSN of
each employee exactly as they are shown on the employ-
800-772-1213. It is also available from the SSA website at
SSA.gov/forms/ss-5. ee's social security card. If the employee's name is not
correct as shown on the card, the employee should re-
Individual taxpayer identification number (ITIN). The quest a new card from the SSA. This may occur if the em-
IRS will issue an ITIN if you are a nonresident or resident ployee's name was changed due to marriage or divorce.
alien and you do not have and are not eligible to get an Form W-4, Employee's Withholding Allowance Certifi-
SSN. The ITIN will expire for any taxpayer who does not cate, is completed by each employee so the correct fed-
file a federal income tax return (or who is not included as a eral income tax can be withheld from their pay.
dependent on the return of another taxpayer) for 3 con- If your employee does not have an SSN, they should
secutive years. In general, if you need to obtain an ITIN, file Form SS-5 with the SSA.
you must attach Form W-7, Application for IRS Individual Other payee. If you make payments to someone who
Taxpayer Identification Number, with your signed, original, is not your employee and you must report the payments
completed tax return and any other required documenta- on an information return, get that person's SSN. If you
tion and mail them to the address in the Instructions for must report payments to an organization, such as a corpo-
Form W-7. Exceptions are covered in the instructions. If ration or partnership, you must get its EIN.
you must include another person's SSN on your return To get the payee's SSN or EIN, use Form W-9, Re-
and that person does not have and cannot get an SSN, quest for Taxpayer Identification Number and Certifica-
enter that person's ITIN. The application is also available tion.
in Spanish. The form is available at IRS.gov/FormW7. A payee who does not provide you with an identifica-
An ITIN is for tax use only. It does not entitle the tion number may be subject to backup withholding. For in-
! holder to social security benefits or change the formation on backup withholding, see the Instructions for
CAUTION holder's employment or immigration status. the Requester of Form W-9 and the General Instructions
for Certain Information Returns.
Employer identification number (EIN). You must also
have an EIN to use as a TIN if you do either of the follow- Income Tax
ing.
• Pay wages to one or more employees. This part explains whether you have to file an income tax
• File pension or excise tax returns. return and when you file it. It also explains how you pay
the tax.
If you must have an EIN, include it along with your SSN
on your Schedule C as instructed. Do I Have To File an Income Tax
You can apply for an EIN:
• Online by clicking on the Employer ID Numbers (EINs) Return?
link at IRS.gov/EIN as long as the principal business You have to file an income tax return for 2022 if your net
location is in the United States or U.S. territories—the earnings from self-employment were $400 or more. If your
EIN is issued immediately once the application infor- net earnings from self-employment were less than $400,
mation is validated; you still have to file an income tax return if you meet any
• By telephone at 267-941-1099 (not a toll-free number) other filing requirement listed in the Instructions for Form
only if the principal business is located outside the 1040.
United States or U.S. territories; or
• By mailing or faxing Form SS-4, Application for Em- How Do I File?
ployer Identification Number. File your income tax return on Form 1040 or Form
New EIN. You may need to get a new EIN if either the 1040-SR and attach Schedule C. Enter the net profit or
form or the ownership of your business changes. For loss from Schedule C on Schedule 1 (Form 1040). Use
more information, see Pub. 1635, Understanding Your Schedule C to figure your net profit or loss from your busi-
EIN. ness. If you operated more than one business as a sole
When you need identification numbers of other per- proprietorship, you must attach a separate Schedule C for
each business.
sons. In operating your business, you will probably make
certain payments you must report on information returns.
These payments are discussed under Information Re-
turns, later in this chapter. You must give the recipient of

Page 6 Chapter 1 Filing and Paying Business Taxes