Question
When paying estimated taxes, do I use my SSN or TIN?
I started a consulting business and I was advised to obtain a taxpayer identification number from the IRS so that I would not have to divulge my personal SSN when transacting business. Subsequently, I signed up at the IRS's website to make business tax payments using that TIN. When I went to make a payment, I discovered that form 1040-ES was not one of the choices. I called the IRS and they said to sign up again and classify it as personal not business. So I signed up again using my business TIN and my personal name/address. At this point I'm confused as to which number I should post my estimated tax payments to. Should I pay to my own SSN or should I pay to the TIN? I don't know why the IRS makes everything so difficult then threatens to penalize you if you don't get it right! I'm not interested in being referred to another website to find this answer. I have already read many websites which is why I posted the question here.
4 months ago - 1 answers
Best Answer
Chosen by Asker
*argh* If you are a sole proprietor or single member LLC who did not elect to be taxed any other way, you will include your taxable income on YOUR 1040 schedule C. Consequently all taxes due will be under your SSN, so the 1040ES payments need to be under the SSN. If you elected to be an S-corp, the income ultimately goes back to the 1040, primarily via a W-2, so you would normally handle the taxes as either withholding on the W-2 or as 1040ES payments. Again the tax still is under your SSN. As for making life difficult, the IRS never told you to get an EIN for a sole proprietor. In fact they told you to use your SSN. (See the W-9 instructions, they highly recommend you give your SSN to the payer.) The IRS says you get an EIN for the business if you have employees, a retirement plan or if the bank requires it. For tax purposes, the SSN was fine.
by v b
4 months ago
Asker's Rating: 