nickopedia | 11-13-2018 07:24 AM | Re: IS an LLC necessary? In simplistic terms, think of an LLC or Corporation as an entity. It's like an actual person.
People are usuaully assigned SSN's for the purpose of a Tax ID.
Corporations & LLC's are usually assigned EIN's for the purpose of a Tax ID.
Some people can't use their SSN, or it's impratical to. Some examples:
1) You reside outside the USA and don't have an SSN.
2) You have already used your SSN on another PayPal account.
3) You are concerned about your privacy and prefer not to give out your SSN for tax purposes.
4) You need to expand the number of accounts used and need more than one Tax ID/EIN.
The EIN is a bonafide TIN, so you are all ready to exceed the 200+20k threshhold; you will be issued work 1099-K by the merchant processor (e.g. PayPal) if you exceed 200 sales AND $20,000 per annum.
To be clear, the EIN is assigned to the business and needs to be in the business name. If it doesn't match records of the IRS, PayPal may kick it back and ask for documents. |