I’m about to publish my condo in Keystone and was hoping someone could tell me the benefits of using an EIN over my SSN? Thanks in advance. Ro
Have no clue what either of those terms mean
EIN = Employer Identification Number. SSN = Social Security Number.
I believe that if you make money with your business, you should be filing taxes quarterly, for which you will need an EIN.
That is just not true. You can pay your taxes quarterly using a SSN. I have been doing that since I was 14.
Thank you for the clarification @anon67190644.
After a bit of research, it seems an EIN makes it easier or atleast more clear about writing off expenses. Any other benefits?
Membership to RestaurantDepot!
Not in this case. You can just use schedule E on your individual return. EIN is good if you are running a business that requires a W9, then you are not giving out your personal social security # all the time. But in this case, airbnb is the only one with your social security #, not the individual guests.
There are lots of reasons. If you operate your hosting biz as an LLC for example, you would use your EIN or Tax ID. You would have a legal layer of protection between yourself and the business.
You can pay yourself as an employee of the business or take draws as a partner. The LLC would pay all expenses involved in running the business, including paying you rent. Additionally, it looks much better financially when you go to take out a loan as an additional, or only, legitimate income source.
It provides you a layer of protection versus operating as a sole proprietor where you are personally on the hook for anything the business does.
You don’t need to be generating millions of dollars a year either. It often makes sense even for very small businesses to operate this way.
Talk to an accountant and or attorney. It’s really basic stuff for any decent professional. Avoid that friend of a friend that does taxes for family & neighbors though.
To be clear though, you can operate as an LLC (Limited Liability Corporation) without having an EIN (Employee Identification Number). It is the LLC that gives you the protection. You needed the EIN if you were going to employ others.
If you are operating the business yourself, as most hosts are, you can be sued as a manager, so LLC doesn’t really help you much, it is so easy to pierce the veil. Better to have good insurance.