Old Sole Proprietorship, New SMLLC: How to Handle Taxes?

by Linda
(West Palm Beach, FL)

I have filed a Schedule C with my tax return for years for a very small business I have that in recent years has some-but-not-much income annually. I have always used only my Social Security number to file. Now I'm forming a SMLLC that I hope will be lucrative. Do I also use my Social Security number and a separate Schedule C when I report the SMLLC income? Or do I need to apply for an EIN for the LLC?

Answer

Whether you have a new EIN or your Social Security Number, you always use your Schedule C for single member LLCs taxed as disregarded entities.

If you look at your Schedule C form, it has a place to enter your Social Security Number (so they can match it to your 1040), and a place for your EIN (it's box D, on the right), if any.

If you have multiple businesses, you'll have more than one copy of your Schedule C--one for each business. But they will all flow through to your 1040.

I would recommend getting an EIN for your single member LLC.

If you are worried about the cost, I have free Employer Identification Number instructions here.

Otherwise, you can pay LegalZoom to do it for you. (scroll to the bottom and click on "EIN").