Does a Personal Service Corporation need a Tax ID (EIN) Number?

A personal services corporation is likely to need a tax ID, but there are some exceptions. If you’re currently running a personal services corporation as the sole owner (sole proprietor) and you have no other employees, then you don’t need a tax ID. Your tax ID when filing your taxes will be your own social security number and you will likely be filing a “Schedule C” with your 1040 tax return.

However, if your personal services corporation has multiple owners, it will need its own tax ID/EIN. It cannot file under one of the owners’ social security numbers because it is a separate entity. If your personal services corporation hires employees, it will also need a tax ID. A tax ID is also an EIN (employer identification number) and is a requirement when hiring employees and paying payroll taxes for them.

Luckily, it’s not difficult for a personal services corporation to get an EIN/Tax ID. To get an Employer Identification Number, a corporation can fill out a simple form and submit it online, through fax, or through the mail. The corporation should do this as soon as possible, because they may need it to open business accounts or get licenses and permits.

Written by Maurice Mallory