Protect Your Identity on 1099s December 1, 2011

Protect Your Identity on 1099s

I am happy to share this guest blogpost, written by my LinkedIn friend who is a financial coach. Her name is Jayn Krasco Stillson.  She has provided some valuable tips on how to reduce identity theft by making quick work of getting a Tax ID# which for your small business. ~ Mary Lascelles

“Hello all.  I’ve had a couple conversations recently about identity theft, and thought I’d offer a simple tip to help protect small business owners (sole proprietors).  This would be someone who conducts their business either in their own name or has filed a dba (doing business as) certificate, not someone who has an incorporated business.

The problem has to do with 1099s. I recently asked a woman who is performing a service for my business for her tax identification number for 1099 purposes.  (For those who don’t know, if you are operating a business and pay an individual (not an incorporated business) more than $600 in a calendar year for service – not the purchase of a product where you pay sales tax, but service - you are required by the IRS to file a 1099 before January 31 of the following year stating the amount of money that you paid them.)  When the woman doing the work for me gave me her social security number (SS#), I got this uneasy feeling.  It’s such a huge responsibility for me to protect that information and so easy for her to avoid sharing it with me.  When I suggested to my service provider that she might consider using a tax ID number for her business, her response was, “my accountant says I don’t need one because of the way I file my taxes.”  This is absolutely true, it’s not necessary for tax purposes, but it is a valuable tool in the battle to protect your identity.

If neither you nor the service provider has a tax identification number, both of your SS#s must be used on the 1099 that is filed with the IRS.  This means that you have each given someone you may hardly know the most important number in your life.  Not only that, you have no idea who might have access to the copies of that form that are kept on file.  (Anyone from the cleaning staff to clerical staff to someone’s family member rummaging through a home office would have your name, SS# and address.)

This problem is so easily solved by obtaining a tax identification number from the IRS website.  The IRS refers to it as an Employer Identification Number or (EIN).  You can obtain one by clicking on this link, clicking on the “Begin Application” button and following the instructions.    https://sa2.www4.irs.gov/modiein/individual/index.jsp
Note that an EIN does not trigger any additional mail from the IRS.  You don’t have to have employees and you are not required to file any special tax forms as a result of obtaining the number.”

This is such an easy way to avoid sharing your SS# with those your do business with. If you have any questions or need assistance completing the form on the IRS website, don’t hesitate to call or email me.  (Jayn@Jaynyk.com 781-665-0895)…I’m happy to help.

*********
> Contact me: Mary Lascelles | ReloMary with your questions regarding selling / buying / moving / relocating. My networks are in place to match you within 24 hours typically with the professionals you’ll need to get the job done right.  Phone:  530.515.6299  Email: relomary@movinglinks4you.com Is ReloMary the answer for YOU when relocating?

 

2 Comments
Storage London December 24th, 2011

Thanks for sharing information .

hawaii movers March 26th, 2012

This weblog is good. There’s always all the appropriate info in the ideas of my fingers. Thanks and keep up the very good work!
Regards,
relocation to hawaii

Leave a Reply