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hey there freedom as you get your creative business up and running there's so many things to understand the question i get a lot is what is a tax id or ein number do i need one what is it used for how do i get one in today's video we'll discuss when you need one how to get one and what it's used for so let's dive in the second that you receive money in exchange for a product or service you have earned income earned income makes you responsible for taxes so you want to start tracking the income and the expenses that go along with that income in order to understand your tax liability when you trade cash for your project service you become a sole proprietor there is no registration needed it is automatic the name of your sole proprietorship defaults to your name and your social security number will be the number that you use on any tax forms like w9 1099 or schedule c when filing your taxes if you've decided this is something you want to do more regularly or you want to grow into a business now is the time to figure out what you want to call or name your business get that name registered legally and then register for a tax id before we get too far let's go over all the terms you've heard this call before you have tax id which is sort of short for tax identification number you have tin which is tax education number you have maybe heard f-e-i-n which is federal employer identification number or what it's really called ein which is short for employer identification number and this is what i'll refer to it as during the rest of this video these are all the same thing just differently so your social security number is never used to identify you and all the information about you can kind of think of an ein as the social security number for your business where it is a number that is registered with the irs that is completely connected to your business name that you've registered and all the information for your business will be referred to through that ein i go into a lot more detail on how to legally obtain a business name that's not your own name uh like a dba or an llc in a video that i i've linked below for you so make sure you check that out while you file a dva or an llc on the state level it's important to know the ein you're filing on the federal level you file this with the irs on their website for free you don't have to have an ein if you are a sole proprietor single member llc or dba you can actually just keep using your social security number but who wants that floating around if you are a multi-member llc or partnership you're required to have an ein because you'll need that for your separate tax return at tax time even though you're not required as a sole proprietor dba or single member llc to have an ein it's always a good idea this gives your business its own number to use for things like filing taxes if you want to open a business bank account they're going to require you to have an ein if you hire employees they're going to require you to have an eiu if you want to apply for a business loan you will need an ein and if you're filling out a w-9 and maybe you do some contract and work for someone else you'll want to have an ein instead of yourself as well you can see where having an ein is going to benefit you so much in your business to keep everything organized and together but also minimizing the use of your social security number at the same time i've provided you a link to the irs website below where you can register for an ein for free it takes about 10 minutes and you will have it instantly when you're done with the process so that you're all set and ready to go i know navigating all this business stuff can be a little overwhelming especially for creatives who are just passionate and want to create so please always post any comments or questions you have below this video and i will help you in any way that i can so that you can be successful i hope that shed some light on this topic for you if you're interested in learning more about these kinds of topics i'd love for you to join my free facebook community you'll find the link down below in the description for this video i hope to see you there don't forget to subscribe