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This message is geared towards Snowshoe, but anyone can answer.
We are getting ready to close our current PayPal account and create a new one under our business EIN and new bank accounts, etc. since we changed our business structure. My question is will be still have to provide a SSN after setting it up using the EIN. I have discussed this on here before with Snowshoe (here), but I want to see and confirm if anyone else out there has a business account using only their EIN and no SSN. I wanted to see Snowshoe, if you were still running as we talked about a few months ago in the listed post.
I want to get this new account going, but I do not want to give PayPal a SSN when we get it setup. This is a legal business with its own EIN that is a legal entity seperate from the owners.
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Here's what we've done, seems to meet all the requirements:
Our business is setup as registered LLC. We have one name associated with the PayPal account as required however, no SSN for that name, just the EIN for the business. You should be OK with the EIN. (Other things that are good is a business bank account and business credit card.)
For people who don't have a registed business, they must provide their SSN or ITIN.
A business bank account is not a problem already setup and such. I just wanted to double check with you Snowshoe, and make sure nothing had changed since the last time we discussed this. Thanks for the input.
You can save some misunderstandings down the road by making sure your biz is registered under the biz name, and stays that way.
I recently got a bill for $5000 from the IRS, for taxes on income that the IRS claimed I had not reported. It turned out they thought all my Paypal/business income was all personal income, and couldn't find it on my 1040. and assumed I had not reported it.
Since I was sure I'd put the account under the EIN, I was puzzled how this could happen. I got various explanations at different times from different Paypal people, but the most logical was that I had properly listed the business with Paypal under my EIN, but they also had my personal SSN. We use several names for the main partnership and the several subsidiary businesses we have, and when the IRS saw that the business name we were using on Paypay didn't match the one on the EIN it automatically reverted (without informing us!) to using my SSN. This was quickly straightened up, once we figured out what had happened and got the names in order and the 1099 updated, but still an annoyance that could have been a major hassle if the IRS had been in a bad mood.
I just wish they had a way for us to completely remove the SS# if you can provide an EIN. I am just waiting a bit to finish my LLC papers here and dump this old account and get a new one going under the LLC's EIN. Like most in business, I like to keep my bussiness seperate from my personal, which means no linking SS# to the business.