Hey folks, this is a hopefully quick article. Today we’re going to cover the Employer Identification Number (EIN) and when/why you might need it.
This is one of those random business-y things that may or may not apply to you. Since generally streamers aren’t like restaurants with their staffing needs the requirement to get an EIN is a little gray.
However, it’s really good to have looked at it and decided that it doesn’t apply instead of never having heard of it.
I can tell already that this is going to be one of those boring articles that someone reads when they google EIN and streamer and not something people are drawn to because of the exhilarating title.
What is the EIN?
The EIN functions a lot like your Social Security Number (SSN) but it’s for a business, not a person. It’s a unique identifier that you can use come tax time or if you need to interact with the IRS. Oftentimes a bank will look for your EIN if you own a corporation and are applying for an account.
The IRS will let you apply for one for free so if it’s something that you think you should do don’t worry about cost. You can apply here.
Why do I care about it as a streamer?
There are two main reasons a streamer cares about it. First, you might care about it because you’re required to have an EIN to run your business. So there are legal reasons.
The second is for potential privacy concerns. If you’re a sole proprietorship and therefore legally considered the same entity as your business you can often use your SSN on business documents. However, that creates some potential issues from an identity theft perspective. The last thing you want is someone who is trying to find out more about you to get their hands on your SSN.
After all, if you pay a contractor over $600 in a year you owe them and the IRS a form 1099-MISC. You have the option to use your EIN or SSN on it. Which would you prefer that contractor has?
When should I care about it?
First, you’re required to get an EIN if you incorporate. That means that if your financial or legal professional (you have one, right?!?!) advises you to do something like file for an LLC you’ll need to apply for an EIN. There are some exceptions to this need, but in general if you’ve reached the point where incorporating makes sense it also makes sense to apply for an EIN; especially since it’s easy and free.
Second, you need an EIN if you’re paying an employee. I don’t know of many streamers who pay an employee unless they’ve hired a business manager, often a spouse. However, if you’re one of those rare streamers that does employ someone you need an EIN.
Conclusion
This is one of those darn business hygiene things that you need to think about now that you’re a business owner. If you’re earning income from streaming you’re a business owner, so don’t forget that! An EIN can be a good idea from an identity theft protection standpoint and it’s absolutely a good idea if it’s required for your business type.
You don’t have to figure this out alone. This is what we do- help streamers make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.
