Page 8 - Tax Guide for Small Business

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You can apply for an EIN: Do I Have To File 12:18 - 30-Jan-2020
• Online by clicking on the Employer ID Numbers (EINs) an Income Tax Return?
link at IRS.gov/Businesses/Small as long as the
principal business location is in the United States or You have to file an income tax return for 2019 if your net
U.S. territories. The EIN is issued immediately once earnings from self-employment were $400 or more. If your
the application information is validated. net earnings from self-employment were less than $400,
• By telephone at 267-941-1099 (not a toll-free number) you still have to file an income tax return if you meet any
only if the principal business is located outside the other filing requirement listed in the Instructions for Forms
United States or U.S. Territories. 1040 and 1040-SR.
• By mailing or faxing Form SS-4, Application for Em- How Do I File?
ployer Identification Number.
New EIN. You may need to get a new EIN if either the File your income tax return on Form 1040 or Form
form or the ownership of your business changes. For 1040-SR and attach Schedule C. Enter the net profit or
more information, see Pub. 1635, Understanding Your loss from Schedule C on Schedule 1 (Form 1040 or
EIN. 1040-SR). Use Schedule C to figure your net profit or loss

When you need identification numbers of other per- from your business. If you operated more than one busi-
ness as a sole proprietorship, you must attach a separate
sons. In operating your business, you will probably make Schedule C for each business.
certain payments you must report on information returns.
These payments are discussed under Information Re- IRS e-file (Electronic Filing)
turns, later in this chapter. You must give the recipient of
these payments (the payee) a statement showing the total
amount paid during the year. You must include the
payee's identification number and your identification num-
ber on the returns and statements.

Employee. If you have employees, you must get an You may be able to file your tax returns electronically us-
SSN from each of them. Record the name and SSN of ing an IRS e-file option. Table 1-1 lists the benefits of IRS
each employee exactly as they are shown on the employ- e-file. IRS e-file uses automation to replace most of the
ee's social security card. If the employee's name is not manual steps needed to process paper returns. As a re-
correct as shown on the card, the employee should re- sult, the processing of e-file returns is faster and more ac-
quest a new card from the SSA. This may occur if the em- curate than the processing of paper returns. As with a pa-
ployee's name was changed due to marriage or divorce. per return, you are responsible for making sure your return
Form W-4, Employee's Withholding Allowance Certifi- contains accurate information and is filed on time.
cate, is completed by each employee so the correct fed-
eral income tax can be withheld from their pay. Using e-file does not affect your chances of an IRS ex-
If your employee does not have an SSN, he or she amination of your return.
should file Form SS-5 with the SSA. You can file most commonly used business forms using

Other payee. If you make payments to someone who IRS e-file. For more information, visit IRS.gov.
is not your employee and you must report the payments
on an information return, get that person's SSN. If you Electronic signatures. Paperless filing is easier than
must report payments to an organization, such as a corpo- you think and it's available to most taxpayers who file
ration or partnership, you must get its EIN. electronically—including those first-time filers who were
To get the payee's SSN or EIN, use Form W-9, Re- 16 or older at the end of 2019. If you file electronically us-
quest for Taxpayer Identification Number and Certifica- ing tax preparation software or a tax professional, you will
tion. sign your return using the Self-Select PIN (personal identi-
A payee who does not provide you with an identifica- fication number) Method for e-file. If you are married filing
tion number may be subject to backup withholding. For in- jointly, you and your spouse will each need to create a
formation on backup withholding, see the Instructions for PIN and enter these PINs as your electronic signatures.
the Requester of Form W-9 and the General Instructions To create a PIN, you must know your adjusted gross in-
for Certain Information Returns. come (AGI) from your originally filed 2018 income tax re-
turn (not from an amended return, Form 1040-X, or any
math error notice from the IRS). You also will need to pro-
Income Tax vide your date of birth (DOB). Make sure your DOB is ac-
curate and matches the information on record with the So-
This part explains whether you have to file an income tax cial Security Administration before you e-file. To do this,
return and when you file it. It also explains how you pay check your annual Social Security Statement.
the tax. With a Self-Select PIN, there is nothing to sign and
nothing to mail—not even your Forms W-2. For more de-
tails on the Self-Select PIN Method, visit IRS.gov.

Page 6 Chapter 1 Filing and Paying Business Taxes