EIN for Two Businesses

Today TaxMama hears from Linda in VA who has this story. “We have a small residential construction business and have established an EIN. We also have a very busy notary business. Until now we have used our Social Security numbers when registering as independent contractor to do notary work. We’d like to get better organized for taxes. Can we also use the same established EIN for both areas of work?”

Hi Linda,

It’s good to see you and your husband getting yourselves set up to be organized – and to provide diversified services – so you always have a steady stream of income. That’s excellent planning.

But when it comes to filing tax returns, you really should be filing separate Schedule C’s for your two businesses. They each fall under completely different classification codes.

Look at the activity codes in the Schedule C instructions on pages 9 and 10 http://www.irs.gov/pub/irs-pdf/i1040sc.pdf .

You can find construction in the 236XXX to 2389XX series. And notaries belong under Other Professional Services 541990 or Other Activities Related to Real Estate – 531390.

If the activity codes are so completely unrelated, and you are expected to file separate Schedule C’s, you would need separate EINs for each.

That is – IF you even need an employer identification number. When you don’t have employees, you don’t really need EINs. The main benefit of having one is to avoid providing your Social Security number to everyone.

Discuss your options further with your tax professional. Perhaps you can come up with a better solution, like setting up an LLC or partnership to own and operate these two businesses? At least an LLC would provide you with some liability protection from the inevitable lawsuits that occur in the construction industry? And it will shield your Social Security Number from identity thieves.

And remember, you’ll find answers to lots of questions, about your business and other tax information, free. Where? At TaxMama.com

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