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Can a sole proprietor have a single EIN for several businesses?

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Can a sole proprietor use the same EIN for several business tradenames or must he have a separate EIN for each business tradename?

An individual who operates several businesses as a "sole proprietor" needs only one employer identification number. The individual may use the same EIN for "Dave Alexander, DBA Dave's Spotless Car Wash" and "Dave Alexander, DBA Dave's Diner."

In short, the primary reason a sole proprietor needs an EIN is wage withholding. Here, the employer is Dave, not the diner or the car wash, they do not exist as a legal entity. Dave is the fella who is personally liable for the wage withholding; i.e. the employer.

IRS Publication 1635, "Understanding Your EIN " indicates, "You don't need a new EIN if you operate multiple businesses."

Just a suggestion, the IRS greatly prefers that banks use the owner's SSN on sole proprietorship accounts. He is the taxpayer and all the sole proprietorship's income is reported on his form 1040. They only gave him the EIN for wage withholding, it does not affect his income taxes.

No matter which number you use, Dave's name goes first in the account title, not the name of the business.

First published on 11/5/01

First published on 11/05/2001

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