Using an EIN rather than SS#

So one of my MSCs just sent me a notice that they are going to be relying more on shoppers who have an EIN (Employee Identification Number) rather than a Social Security number. They say that "more companies will be doing so" because it promotes more of a "professional" or business appearance for the Independent Contractors (they will no longer call them shoppers).

So what do you think? Doesn't that set up a potential conflict between your SS# and the EIN? Aren't we just supposed to have one number to identify ourselves? Are they trying to "help" us formalize our "businesses"? How many people ONLY mystery shop versus doing it part time?

The company did go on to say that it will only be mandatory for ICs who earn over $600/year with them. Since this notice was related to my first check for a whopping $7.54, I've got a way to go with them before I need an EIN.

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In my opinion, it's no no no, but that's just me. I do shops regularly for over 50 companies, and a few have the EIN "suggested" requirement, but they implemented that requirement AFTER I started working for them. I never got the EIN. I still work for them on regular basis. Other shoppers started working for these companies later than me and did not have to get an EIN. It's not a necessity. I personally don't agree with it.
I think it's a good thing to refer to shoppers as Independent Contractors instead of mystery shoppers. It may help remind newbies that they are ICs running their own business. Too many mystery shoppers think they are either employees of the mystery shopping companies or that they are customers of the mystery shopping company.

As for the EIN, I don't have one and don't plan to get one. Many shoppers use an EIN and like it and that's fine. Everybody makes their own choice. I researched the EIN and decided against it. I will continue to use my SS #. So far in the last few years two companies have announced that it would be mandatory to have an EIN: Maritz and The Source (TrendSource). They both backed off the requirement because they realized that a lot of shoppers would just stop shopping for them rather than get the EIN.
I've done shops for several years now for "The Source" (formerly Trendsource). As long as I don't go over $600.00/yr, they're good with me just having my SS#. I don't ever plan to get an EIN. If I get close to $600, I'll stop shopping for them till next year. But I've done it this way with them for years now with no problem (as long as I stay under $600./yr).
As an Independent Contractor for mystery shopping (Occupation code other--- 999999), there is no tax advantage to using the EIN on your schedule C for being a sole proprietor.

But... it is free... and it does protect your SSN from being "out there" with all these mystery shopping companies. If an MSC ever gets hacked... your SSN and information is out there... No one steals an EIN

[www.irs.gov]
@guysmom wrote:

I've done shops for several years now for "The Source" (formerly Trendsource). As long as I don't go over $600.00/yr, they're good with me just having my SS#. I don't ever plan to get an EIN. If I get close to $600, I'll stop shopping for them till next year. But I've done it this way with them for years now with no problem (as long as I stay under $600./yr).

Not true. The IRS requires that they provide a 1099-MISC for any amount over $600, whether it is via a SSN or EIN. Working in taxes, I find that those people who keep their limits under $600 do so because they do not want to claim the money as income and believe that the IRS will never know about their additional income.

Not that I am indicating that towards you personally. I am posting for information to all shoppers.

The IRS definition of income includes any gain derived worldwide.... which also includes bartering or exchanging services for products. Any gain is taxable income to the IRS. Just because the IRS does not get a notification, does not mean that the income should not be reported... if no where else than as income on 1040, line 21.

And if any shopper should have had a time in the past when they did not report all income on their tax return, do not ever get rid of your tax forms. There is no statue of limitation on tax fraud. They can go back a lifetime, and even further if the money is related to some form of inheritance.

Honest people need only keep their returns for 3-7 years.
I only use an EIN for mystery shopping. It is my business, and using an EIN is just (to me) another degree of separation between my personal finances and my business finances. Same reason I have a separate business PayPal account and separate bank account. In my state (California) you don't have to file a DBA if you use your real name in your business name, so my EIN and tax returns are all just with my personal name as my business name.
Ms. Baker, Guysmom is correct about The Source (formerly Trendsource). They DO require shoppers to get an EIN if they have close to $600 in yearly payments with them. I am quite sure Guysmom pays her taxes and understands the tax laws.
By obtaining a EIN you are potentially opening the door to local and Federal business regulations. You are inviting more government interference into your lives. Best to consult with an accountant and/or attorney before taking the plunge.

I have provided professional services (IT) in the past, at an hourly rate. I do not have a EIN. The companies issue the appropriate 1099 against my SSN at the end of the year. I do my own taxes. I have yet to see how a EIN helps me.

You want to protect your personal assets from your business? Then you need to create a business, LLCs are very popular for this, and set up proper accounting procedures. This would include a payroll system as most lenders will not accept business ledgers as proof of income.

My posts are solely based on my opinions and for my entertainment, contact a professional if you need real advice.

When you get in debt you become a slave. - Andrew Jackson
But lenders DO accept your Schedule C as proof of business income! I have gotten 2 mortgages and a HELOC based on my Schedule C income.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.
@JASFLALMT wrote:

Ms. Baker, Guysmom is correct about The Source (formerly Trendsource). They DO require shoppers to get an EIN if they have close to $600 in yearly payments with them. I am quite sure Guysmom pays her taxes and understands the tax laws.
YES YES!! JAS is correct!! I pay my taxes!! I just don't get a 1099 from The Source (or ANY MSC for which I earn less than $600/yr in fees). HOWEVER....I have a spreadsheet and keep track of all my fees earned, since I only do this part-time, and more as a hobby. I typically earn between $2000-$2500/yr, so when I do my taxes, I subtract my mileage deduction from the fees earned, and that's what I pay taxes on. It's not a whole lot, but I DO pay my taxes!!

But The Source WILL ALLOW you to go by only your SS# if your earning are less than $600.00/yr, because they DO NOT SEND a 1099 for under $600.00. Not sure if Ms Baker knew what I was trying to say in above post. Hope this clarifies it.

Edited 2 time(s). Last edit at 08/23/2017 01:11PM by guysmom.
@guysmom wrote:

[
YES YES!! JAS is correct!! I pay my taxes!! I just don't get a 1099 from The Source (or ANY MSC for which I earn less than $600/yr in fees). HOWEVER....I have a spreadsheet and keep track of all my fees earned, since I only do this part-time, and more as a hobby. I typically earn between $2000-$2500/yr, so when I do my taxes, I subtract my mileage deduction from the fees earned, and that's what I pay taxes on. It's not a whole lot, but I DO pay my taxes!!
.

I'm not trying to be troublesome here, I'm just saying how the IRS views income.

My advice on what was posted....

Don't ever post that you are doing this as "more as a hobby." That means you cannot deduct your expenses, and your income is not reported on schedule C, and you do not pay self employment on it. It means it is direct income, form 1040, line 21, and fully taxable.

People, listen up.

As a shopper, always, always, always indicate that the sole purpose for your shopping is to make a profit. Your intention is to have financial gain through this work. Never, never, never say it's like a hobby to you.

Again, I am not trying to be troublesome, and it is fine that, as shoppers, you file your own taxes. It is actually better that you file your own taxes than to go to a professional. If you make a mistake, the IRS does not assess a penalty against you. You may have to prove, through receipts, what you have done, but there won't be penalties. If I make a mistake on a decision between, say hobby income or self employment, then it is a penalty of $500 for every occurrence where due diligence cannot be proven on my part.

I'm not returning to this thread. I said, "Not that I am indicating that towards you personally. I am posting for information to all shoppers."

and it has been taken personally and defensively.... not my intent, and I won't be a part of this any longer.

I recommend all shoppers to use an EIN because it keeps your SSN from being put out there with all these companies. There is no financial gain, but... also, there is no financial loss/risk by getting and using the EIN.

Have a good day.
Good advice Ms. Baker. A friend of mine raises sheep and that's expensive. She lost out on a lot of deductions because she reported it as a hobby. Because of that, she was only allowed to lose money like 2 years in a row. If she had done it as a business, she would have had expenses to deduct. Personally, an EIN was a line in the sand for me. I stopped working for the company that required it. I report all of my income on my taxes (as we all do, right), but I didn't want to get popped into a different category with the IRS. I'm not totally sure why, but I don't want an EIN.
@Ms.Baker wrote:

and it has been taken personally and defensively.... not my intent...

You wrote "not true" in response to guysmom stating that Trendsource requires an EIN for amounts over $600. Why wouldn't someone get a little defensive when you write that it's not true? And it IS true. I don't get it.
@walesmaven wrote:

But lenders DO accept your Schedule C as proof of business income! I have gotten 2 mortgages and a HELOC based on my Schedule C income.

It depends on the lender as well as the loan type. You are correct, In most cases, your tax forms can be used. If everything is under a company name, the lender may require three years (potentially audited) of returns. Setting up a payroll has it's potential benefits.

My posts are solely based on my opinions and for my entertainment, contact a professional if you need real advice.

When you get in debt you become a slave. - Andrew Jackson
isaiah,
I was never asked for audited forms. In addition, I sold residential real estate for 19 years and worked directly with buyers and their lenders on getting them prequalified. Never did a lender ask a self-employed buyer for more than 2 years of tax returns and they did NOT have to be audits and the business name was always accepted if it was doing business under the buyers name. I have also worked with many other home buyers and renters, as a personal mentor, and see their loan apps, with self-employment as the only income, being processed and accepted routinely as I have just described. There is NO need for an EIN, an LLC, a small business corp, etc, for most self-employed people who do not have any other employees! The sky is NOT falling.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.
I work a lot for Trend Source (The Source) and they required at the time we all get the EIN#. Much ado about nothing for me as i'm retired. I've been using EIN# for years, only for the Trend, I hear they changed, but never looked into it. Nothing is different because of it. I'm not recommending it, ask your tax man, but it certainly
never hurt me. There was such a stink over it on the forum years ago with a now deceased member practually
hating me for getting it...what did he care? Find out what's best for you, strangers don't know your finance's.
I never would have gotten it, but the Source insisted and I wanted to work for them, end of story.

Live consciously....
I have one because it was free & I think it's a good idea. I'd rather MSC's have my EIN on their books than my SS number. I'm not sure this is true, but from what I've read, our SS numbers are the easiest to steal.
As a former tax professional, I regularly saw people hand over their kids SS numbers to family and friends to milk EIC. While it is an easy way to get extra money now. It will be deleterious in the long run for the children.

An EIN tells the IRS you're serious about trying to make a successful business. I am not making decent money in MS at the moment. Last year, I told the CPA, she had to show I made a profit so the IRS wouldn't reclassify my adventure as a hobby. I'd rather cough up money in a loss year, than trying to prove I have a viable business that the govt reclassified as a hobby. It is almost impossible to reclassify as a business when the IRS decides it's a hobby.

Hobby has severe restrictions for deductions. A business profitable or not has a plethora of deductions. Last year I wrote off my most of the time inaccurate brand new GPS unit.

YMMV, but I wholeheartedly recommend getting an EIN. You can apply through the IRS.gov website and have one immediately. It is free.

I will add this recommendation. Print the paperwork off, file the paperwork and write the number down in multiple places, so you don't lose it. Ask me how I know this is extremely important.

Bottom line, I prefer signing up with my EIN because I do not trust anyone with their computer security and my SS#.

Live your life in such a way that when your feet hit the floor in the morning; the devil shudders...And yells OH #%*+! SHE'S AWAKE!
My situation is different than most. Having worked for the then TrendSource (The Source) they required an EIN #. this was years ago, so i got one. I work for them all them time, and it is the only company I have the EIN with.
I have not had a problem, have had it for years, nothing has happened negatively. I'm not sure if they changed it, i think I heard it is no longer necessary, but not sure. There was at that time i got it, a fellow member (now deceased), who tore me apart for getting one, oh well, I'm here to tell the story. Talk to your accountant.

Live consciously....
The above is just an opinion from someone who knows little about our business. Everyone should check their own area then weigh the pros and cons.

Equal rights for others does not mean fewer rights for you. It's not pie.
"I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag." -Molly Ivins
Never try to teach a pig to sing. It's a waste of your time and it really annoys the pig.
@@#$%&...are you an Atty, you speak as though you may be reciting the law.....inquiring minds want to know.

Live consciously....


Edited 1 time(s). Last edit at 09/01/2017 07:34PM by Irene_L.A..
Who invited Copeland over to this thread anyhow??? His long, drawn out posts remind me of Shoptastic!!!
Please go away!
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