Solo 401K, EIN, 1099s

7 replies
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Hello.

I am thinking about getting a Solo 401(k), and my understanding is that this will require me to have an FEIN.

I currently do 100% 1099 contract work, and use SSN.

I believe I am considered a sole proprietor - I have no employees, and do all the work myself. I file joint annual tax returns with my spouse whose income all comes from his employer on a W-2.

My hang up here is the FEIN.

If I generate an FEIN through the IRS, would I then need to issue myself (to my SSN) a 1099-NEC from my FEIN?

How does switching from SSN to FEIN change my annual tax process?

Thank you so much for helping get me started.

Not A Product Question

MinhT1

Alumni - Intuit

The FEIN is only required in certain states when a sole proprietorship starts hiring employees.

As a sole proprietor, even if you do not have employees, you can choose to apply for an EIN which you could use to fill forms W-9 instead of using your SSN. Having an EIN does not change your tax filing obligations in any way.

As a sole proprietor, you do not pay yourself and do not issue form 1099-NEC to yourself.

For your information, please read this IRS document about the retirement plans for self-employed people.

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LinUSAAuthor

Level 2

Hi, Minh, and thank you for the reply and sharing the link.

It looks like in order to open a Solo 401k I would be required to get an EIN, regardless of state?

If I do switch over to an EIN, I'm just not clear on how the EIN will link to my income when I file taxes using my SSN.

The only reason I would do the EIN is to have the ability to create the Solo 401k.

Thank you for any additional expertise you may have to share.

ThomasM125

Alumni - Intuit

When you prepare your schedule C to report your self-employment income, you will do so both under your social security number and also your EIN number. The EIN number will appear in box C but your social security number will appear at the top of the form.

So, the IRS will still credit your income and self-employment tax to your social security account, the EIN number is just there to link whatever reports your use it for to your schedule C.

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