Re: Stay Away From EIN
If you have a good account and it looks like smooth sailing ahead, I would add an EIN when asked. There is no sense on giving up a good account if you don't have to, unless your goal is to not pay taxes on your profits.
I have always paid what I owe (I'm too chicken to try to cheat the IRS) so it was a no-brainer for me.
YES, there is some extra paperwork and forms that must be filed if you are going to be using corporations or LLC's for your business. If you are not comfortable filing them yourself, you can hire a tax professional to do it for you. It does NOT have to cost a fortune! As long as you keep good records and don't just dump a box of papers and receipts on the professional's desk, the cost is usually minimal.
The tax pro has another advantage - they can find legal tax deductions for you that you may not be aware of.
In my experience, as long as you are being honest, you don't have to be terrified of the IRS. I have been audited and the guy told me that 99% of what they find are honest mistakes which can be quickly cleared up. I was VERY nervous for two weeks before the audit, but the actual audit itself was nothing. I ended up writing them a check for some trivial amount - I'm sure the check didn't even cover the auditor's time and gas.
I had also thought they might be very nosey about what I was doing, how I was doing it, what I was selling, etc. But they could have cared less. As long as the numbers match up and you have some sort of receipts or credit card statements to prove your expenses, that is really all they care about.
The bottom line is, pay the professional. It probably costs a lot less than you think and that way, you make sure that everything is filed correctly.
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