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| byronius maximus | 10-16-2017 02:06 PM |
Does anyone get EIN and skip the LLC?
Personal pp accounts are fine for certain things, but I gather that business accounts are required for other things, like if you want to use pp on e-junkie......
But if you want several business pp accounts, you need the IRS to give you several EINs.....do you really have to pay to set up LLC, for example, for them all?
What would happen if you requested the EIN just to get the business account with pp, and just never got around to setting up the partnership with a state?
Sure, you pay taxes, you can report any earnings at tax time....
But if you get the EIN and stay under the 200/20,000 limit for each account, why go through the hassle and expense of maintaining the LLC?
Is the worst that happens that you eventually lose that pp account? |
| BaggaDonuts | 10-16-2017 08:34 PM |
Re: Does anyone get EIN and skip the LLC?
I think it is more on the side of telling the IRS that you need the EIN for an entity that does not exist. I haven't read the full terms for the EIN, but I think there is a 'penalty of purjury' kind of lingo in there, which is much more daunting than anything Paypal is going to throw at you.
I've read that people do the entity later. Technically the entity doesn't really need to file anything depending on the type of entity that it is. I'm not sure how adamant they are about running people down for false EIN creation, etc. Just sayin.. |
| ebaystealth1974 | 10-16-2017 08:54 PM |
Re: Does anyone get EIN and skip the LLC?
If you are gonna make the kind of money that requiring an EIN is gonna make, just pay for it and stay out of trouble. |
| byronius maximus | 10-16-2017 08:59 PM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by BaggaDonuts
(Post 878176)
I've read that people do the entity later. Technically the entity doesn't really need to file anything depending on the type of entity that it is. I'm not sure how adamant they are about running people down for false EIN creation, etc. Just sayin..
| Thanks for the response. I had heard here you could take up to a year to file paperwork with a state. But here's a twist:
1)Request the EIN from the IRS
2)Use the EIN to get business account with PP, but don't do any (more) sales with that PP account.
3) Have the IRS deactivate that EIN because the board members started squabbling or whatever....
4)Go use that business PP account. Report all earnings and pay taxes on the profits of that PP account at tax time.....
So, how often does PP re-check that your EIN is active after the initial check? |
| byronius maximus | 10-16-2017 09:01 PM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by ebaystealth1974
(Post 878180)
If you are gonna make the kind of money that requiring an EIN is gonna make, just pay for it and stay out of trouble.
| That is an option. But if there is no trouble to get in, I'd like to not have the headache and expense of starting corporations and buying out of state mailing forwarding things and all that...... |
| phaz0rz | 10-17-2017 07:29 AM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by byronius maximus
(Post 878182)
Thanks for the response. I had heard here you could take up to a year to file paperwork with a state. But here's a twist:
1)Request the EIN from the IRS
2)Use the EIN to get business account with PP, but don't do any (more) sales with that PP account.
3) Have the IRS deactivate that EIN because the board members started squabbling or whatever....
4)Go use that business PP account. Report all earnings and pay taxes on the profits of that PP account at tax time.....
So, how often does PP re-check that your EIN is active after the initial check?
| Every year at tax time. Each year when Paypal sends tax documents to the IRS, the IRS reports back to PP any invalid tax ID's. If you cancelled your EIN your tax ID would come back as invalid and PP would send you a W9 to correct it. Depending on your organization type, you'd probably still be able to pay taxes since you can pass the profits to your personal taxes. But your Paypal account would be screwed after 1 year at the most.
Just search for the cheapest state to form an LLC in and stay legal. I seriously recommend against messing around with tax ID's like this. |
| newjerseymax | 10-17-2017 09:52 AM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by phaz0rz
(Post 878263)
Every year at tax time. Each year when Paypal sends tax documents to the IRS, the IRS reports back to PP any invalid tax ID's. If you cancelled your EIN your tax ID would come back as invalid and PP would send you a W9 to correct it. Depending on your organization type, you'd probably still be able to pay taxes since you can pass the profits to your personal taxes. But your Paypal account would be screwed after 1 year at the most.
Just search for the cheapest state to form an LLC in and stay legal. I seriously recommend against messing around with tax ID's like this.
| Don't forget some states require state taxes, so you want to avoid those states when forming Corporation. |
| byronius maximus | 10-17-2017 10:27 AM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by phaz0rz
(Post 878263)
Every year at tax time. Each year when Paypal sends tax documents to the IRS, the IRS reports back to PP any invalid tax ID's.
| Thanks, I've read this forum long enough to know to value your advice.
To clarify, if you stay under the 200/20K limit, would Paypal even be sending tax docs to IRS for that account?
And yeah, I'm not smart enough to play cute with .gov, but I also believe in minimal compliance, and like to find legal ways to comply, while not over complying.
Since I have read that you have up to a year to file with a state after obtaining an EIN, and you can have the IRS deactivate your EIN, and that if you want to start that business after all, you can call IRS and REactivate that same EIN later.......it just got my wheels turning..........
But yeah, you are all right, probably better not to mess with it, sometimes I'm just smart enough to get myself in trouble........ |
| Lucynda | 10-17-2017 10:56 AM |
Quote:
Originally Posted by byronius maximus
(Post 878288)
Thanks, I've read this forum long enough to know to value your advice.
To clarify, if you stay under the 200/20K limit, would Paypal even be sending tax docs to IRS for that account?
If you stay under 20k per account they don't send anything to the IRS
And yeah, I'm not smart enough to play cute with .gov, but I also believe in minimal compliance, and like to find legal ways to comply, while not over complying.
Since I have read that you have up to a year to file with a state after obtaining an EIN, and you can have the IRS deactivate your EIN, and that if you want to start that business after all, you can call IRS and REactivate that same EIN later.......it just got my wheels turning..........
But yeah, you are all right, probably better not to mess with it, sometimes I'm just smart enough to get myself in trouble........
| If you stay under 20k paypal doesnt report to the IRS. Most peopke just have multiple accounts. There is nothing wrong with having an EIN without an LLC |
| byronius maximus | 10-17-2017 11:37 AM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by Lucynda
(Post 878292)
If you stay under 20k paypal doesnt report to the IRS. Most peopke just have multiple accounts. There is nothing wrong with having an EIN without an LLC
| Thanks for the input....
Yeah, I get the sense that for Ebay or whatever, most folks' strategy is to have multiple personal PP accounts, spread sales and avoid the need for EIN.
BUT, if you want to use PP as a checkout on a site like e-junkie or similar, you have to have a business PP account, so you need EIN right away. At least, that's what I think the facts are.....So if I want multiple business PP accounts to spread sales across, I need multiple EIN, I just want to avoid having to also, simultaneously, creating (and paying for and keeping track of) multiple corporations in various states............ |
| newjerseymax | 10-23-2017 12:38 PM |
Re: Does anyone get EIN and skip the LLC?
If your running multiple pp accounts under 20k and for some reason you get audited, your bank accounts will show the additional income, it could be a house of cards waiting to fall. Very risky game -imo |
| byronius maximus | 10-23-2017 01:17 PM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by newjerseymax
(Post 879482)
If your running multiple pp accounts under 20k and for some reason you get audited, your bank accounts will show the additional income, it could be a house of cards waiting to fall. Very risky game -imo
| Not sure how this applies, why would an audit matter? I'm not trying to get out of declaring income and paying taxes on it....what house of cards would there be? |
| newjerseymax | 10-23-2017 02:25 PM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by byronius maximus
(Post 879488)
Not sure how this applies, why would an audit matter? I'm not trying to get out of declaring income and paying taxes on it....what house of cards would there be?
| Seems then you got your mind made up... Why ask for advice then? :deadhorse: |
| byronius maximus | 10-24-2017 12:14 AM |
Re: Does anyone get EIN and skip the LLC?
Quote:
Originally Posted by newjerseymax
(Post 879509)
Seems then you got your mind made up... Why ask for advice then? :deadhorse:
| WTF are you talking about? I asked you in particular for clarification of your post, I wasn't trying to make you defensive. I haven't made my mind up, I'm wondering if anyone knows why this plan can or can't work.... |
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