Do I / Why do I need a EIN?

Discussion in 'Business Operations' started by Tyler7692, Sep 7, 2007.

  1. Tyler7692

    Tyler7692 LawnSite Bronze Member
    Posts: 1,086

    I am trying to figure this out.

    In the state of Indiana, do I need an EIN? (Employer Identification Number)

    Are lawn services taxed?

    Or are chemical apps taxed?
    What if they are subbed out?

    HELP?!

    How much does it cost to talk to an accountant?

    What tax forms do you file at the end of the year? I have my business licensed under LLC.
    How do I file the business separately from personal?

    I am lost. Please, any help or advice is appreciated.
     
  2. lawnpro724

    lawnpro724 LawnSite Silver Member
    Posts: 2,201

    FEIN has several purposes. The main one is what is stands for Federal Employers Identification Number a must if you have employees. The other reason to get one is so you don't have to give out your social security # to company's you work for. Go to www.irs.gov
     
  3. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    uhm you don't need one right away but eventually the IRS will push you for it, the longer you wait the harder they push.

    For an individual your social security number is your IRS account number, all of your taxes are filed under this, that is all a soc.sec.number is for the IRS is an account number, and the EIN is the same thing for a business. As a solo you can, for some time, file it all under the soc.sec.number but eventually you still need the EIN.

    What the EIN does, in a nutshell, is encompass all of your business and personal taxes under one roof, roughly speaking, so yeah you do need it because eventually confusion happens, it doesn't take that long, do it once and be done with it.

    what lawnpro said, www.irs.gov
     
  4. maintenanceguy

    maintenanceguy LawnSite Member
    from NJ
    Posts: 156

    If you're a sole propriotorship, meaning the business and you are really the same thing than you don't need one. If Tyler's lawn service is just Tyler working for a living than the IRS does not consider Tyler to be a business and Tyler just uses Tyler's SS# for everything.

    But Tyler's lawncare could be its own entity, separate from Tyler. If it's a corp, LLC, partnership, or other type of business it needs it's own social security number known as an EIN.

    The Tyler's lawncare pays its own taxes, buys its one materials and equipment, and hires its own employees.

    There are tax and liability advantages to separating you from the business. most small businesses start out as sole proprietorships and eventually move into some other form of business.
     
  5. Grits

    Grits LawnSite Silver Member
    from Florida
    Posts: 2,994

    Excellent explanation.
     
  6. JayD

    JayD LawnSite Silver Member
    Posts: 2,060

    Wow....I just ran into this today myself.....
    For today, I used my SS#, but I want to get the EIN.
    I will go look for that form.
     
  7. CTJ

    CTJ LawnSite Member
    Posts: 37

  8. green horizons

    green horizons LawnSite Member
    from zone 5
    Posts: 144

    I operated for years as a sole-proprieter. I used my SS# as an EIN. This is how it's done. If you have employees, are incorporated, then get an EIN. Accountant costs vary just like any contractor, so shop around. Taxing of services is trickier business. You should seek appropriate counsel at any cost.
     
  9. TSM

    TSM LawnSite Senior Member
    from MA
    Posts: 707

    I'll add this.... when seeking an accountant remember they work for you!

    I've been in business a number of years and have used a total of 4 accountants. (simular to lawyers, insurance agents and bankers these guys typically look for ways of 'helping' your business make THEM more $$$. Do not be intimidated by them...ask if they handle other green industry accounts...ask for referrals and check them out (i got a call from a start up company a couple of years ago asking me how i felt about the accountant I was using and we spent about an hour and half on the phone discussing more than accountants but when the call ended at least the guy had some food for thought)

    When I first decided I needed an accountant I was very sheepish...meaning I let them tell me how to run my business including what services i should be offering. Didnt take me to long to figure out they wanted to lead me down a path that would profit them....but what about me??

    They person I use now and have been using for about 10 years, we get along great. But I remember the first season using him. At the end of the season when i was in his office to get taxes preped he said to me "looks like you're doing ok...but we need to get some winter revenue generated...you should consider snow plowing"
    lol...thats when I jumped up off the seat asked for all my paper work back and told him to plow his own driveway...i'm outa here!

    He looked me in the eye...paused a bit...then said "ok, i'm understanding you better now"

    anyway, point is as already stated, you need to interview these folks like any other employee..they'll be workin for you and not the other way around

    lots o luck
     
  10. razor1

    razor1 LawnSite Bronze Member
    Posts: 1,985

    TSM, Good point. I'm on my third accountant and counting. I hate switching, but when the price skyrockets, you gotta do what you gotta do. :hammerhead:
     

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