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Thread: Questions regarding first establishing your EIN?

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    Default Questions regarding first establishing your EIN?

    I live in the state of Florida and through my research it seems that in at least some states, it is required that you file taxes for your SSN and EIN each year, even if your business makes $0. Does anyone know if this is true in my state?

    I am in the process of getting this business up and running, though it will probably take a few years before everything is set in place and the first product is ready to be sold. I filed for an LLC in January of this year, however I have not yet established an EIN.

    I am looking to undergo a funding program in the next couple of months that combines business and personal funding. (I do have the option to go strictly personal, but it would result in a lot less capital). In order to do this, I need a business bank account set up, which of course is where the SS4-form would come into play.



    If I am not at the point yet where I would be able to "prove" that I did not make any money from the business, could creating an EIN too early come back to haunt me in the future? It seems that most people say that creating one really does not affect you in any way, but I also know that it means you are another statistic in the world of businesses in the eyes of the IRS and I want to fully understand what I'm getting myself into first.



    ALSO. If anyone has any strong preferences toward going the sole prop or s-corp etc. route, please advise. The more insight the better.

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    EIN is just an ID number for your business for tax purposes. You don't really need one for single-person LLCs. I'd do the sole prop route instead of the corporation for the moment. Later when you have income, there might be reasons to adjust your business to be a corporation, but for the moment, there's not.

    If all you are is a single-person LLC and didn't elect to be treated like a corporation, your business tax returns will be a schedule on your personal return. Even if you don't have any income, you might have a loss to record, so it'll still be worth the paperwork.
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    As far as the IRS is concerned, a single-member LLC is a sole proprietorship and should file the same way as a sole proprietor would. Because of this, it doesn't really matter to the IRS if you use your social security or EIN... The IRS really couldn't care less.

    As a single-member LLC, your EIN is more or less a "DBA number" for your social security.
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    (This message has been deleted).
    Last edited by jsimone8; 12-10-2016 at 06:49 PM. Reason: Delete

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    Quote Originally Posted by BizAdvisor View Post
    As far as the IRS is concerned, a single-member LLC is a sole proprietorship and should file the same way as a sole proprietor would. Because of this, it doesn't really matter to the IRS if you use your social security or EIN... The IRS really couldn't care less.

    As a single-member LLC, your EIN is more or less a "DBA number" for your social security.
    Thank you so much for your time and input.
    I suppose I'm thinking that if you use the same number (SSN) for both your individual taxes and your business (sole-prop), you would only appear in one "pile" of the IRS pool... Versus using both a SSN/EIN and being among the lists of both individuals and businesses separately, thus being more likely to be audited as a business. Is this at all a legitimate concern?

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    You're assuming the IRS doesn't have at least an IBM PC circa 1992 to look at your tax return.

    C'mon, it's 2016. They can figure out whether to audit you from running every number and cross referencing against 1099s and W2's. They can certainly relate your SSN with your EIN.
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    It seems that most people have done a good job of answering your federal tax question.
    As for the first part of your question.... FL generally does not tax pass through entities, (partnerships and S corps) and solos for state business income tax purposes.
    There is one rule that states that if a corp entity become a member of your LLC then the business will be opened to state income tax.

    Generally most states require you to file something with the state weather you make revenue or not.
    But don't just thank about tax returns...

    Now lets talk compliance, specifically annual reports.
    In the great state of FL you get to file annual reports with the state. They are different then tax returns and LLCs get the privilege of dropping $138.75 irrespective of the amount of money made.
    And if you are a little bit late in filing that report the late fee for that is $400.

    So even through you don't have to file a state business income tax return you do have to the pleasure of filing your annual report and paying money anyways.
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    Thank you everyone to all of the insight so far!
    Another question I have is in the event that there was ever an audit on a company (LLC) that reported that they did not make any money... Is there a way to "prove" that you did not make any money? That is also something that concerns me. I understand having to prove that you made and spent a certain amount... But how do you prove "air"?

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    You're not going to get audited for a $0 income on a company where no one is reporting a 1099, no one is claiming they paid you for something, you don't report sales tax anywhere.

    Remember: Congress intentionally underfunds the IRS so that they can't audit too many people, so they focus on the people and companies with the most "oddities" on their return. A $0 income entity with minimal losses is soooo not an oddity.
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    Quote Originally Posted by Freelancier View Post
    You're not going to get audited for a $0 income on a company where no one is reporting a 1099, no one is claiming they paid you for something, you don't report sales tax anywhere.

    Remember: Congress intentionally underfunds the IRS so that they can't audit too many people, so they focus on the people and companies with the most "oddities" on their return. A $0 income entity with minimal losses is soooo not an oddity.
    Okay great thank you!

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