EIN's: All the Best-Dressed Freelancers are Wearing One

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Up Your Freelance Game by Applying for an EIN

As a freelancer, I sometimes forget I am running a company of one. I am both the product and the advertising, the management, and the HR department (self-care days are mandatory here). Everything I do is for the benefit of sharing my expertise with others in exchange for capital. If you’re a freelancer – Congratulations, you own a business!

Company of One

I hope you’re still with me on this extended yet still very applicable metaphor because there are strategic benefits freelancers can enjoy when thinking of themselves more like a company than a person. Since you are in the business of you, selling the product of your work, you truly are a sole proprietor. This means you and you alone are responsible for the reputation of your work and your product output. Enhancing the credibility of a business is something any company prioritizes. Why wouldn’t any freelancer jump at the opportunity to do the same?

Why Have an EIN?

One such way of building out a solid reputation as a serious business owner is to have an EIN, or an Employer Identification Number. Sometimes referred to as a business tax ID, an EIN is a unique nine-digit number used both when filling out W9 forms and filing taxes. Basically, it’s a type of Tax Identification Number (TIN) the IRS uses to track income and owed taxes associated with your business.

To be clear, applying for and subsequently having an EIN isn’t a necessary requirement as a freelancer, but neither is dressing in business casual just to work by yourself in your home office. It simply adds another level of professionalism. You already look the part and you certainly have the skills, why not help your business shout “career” instead of whispering “side hustle?”

Even if all the “see yourself as your best self” stuff isn’t for you, there are more tangible, cut and dried, benefits to electing for an EIN. The last time you were on-boarded to a new company, you shared your Social Security Number on a PDF form and sent it off via email. Any hacker who had the desire could easily break into that message and commence with identity theft. Aside from the darker, more dramatic side of the internet, having an EIN protects against any scenarios in which your W9 form is incorrectly filed, accidentally shared, or lost if a new company suddenly goes out of business.

Establish Your Business Identity

Having an EIN is all about establishing the business of your freelancing work. EINs speed up business loan applications, help in opening a business bank account, hire employees down the road, and allow you to expand your work internationally with ease. Mostly, it builds trust with vendors and helps you to attract more potential clients. Legitimizing the work you do is everything to a freelancer and using an EIN on your tax returns and payments shows you’re an independent contractor, not an employee, and can make you more attractive to prospective clients.

Apply for an EIN

Applying for an EIN is relatively straightforward as it’s available online, but only go through the IRS website. It’s free and secure. Anywhere that charges you for this service is a scam. Once you have your EIN you can begin using it immediately.

While you’re already a great freelancer, in our quickly evolving professional world, having an EIN can only enhance your company of one. From one freelancer to another, why not take the leap?

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Sunday, 13 June 2021

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