I do PRN work in healthcare. I operate it like it's my own business so I obtained an EIN to write off expenses, mileage, etc. How do I use my EIN along with my W2?

[PhyllisG · Accepted solution]

As a sole proprietorship, the Employer Identification Number (EIN) is generally used when you have employees. However, if you are an entity such as a LLC, corporation, partnership, etc., then it is mandatory that you obtain an EIN.

If you do not have employees, and you are filing as a self-employed individual, you will input your Social Security Number (SSN) in the return.  Your SSN will carry over to the wage section of the return (Form W-2) and the 1040 Schedule C or Schedule C-EZ for your business income and expense reporting.

You will not begin using your EIN until you have employees (the number is then reported on the payroll tax returns). If the nature or structure of your business changes to one of the aforementioned entities, then you will be required to obtain a new EIN. The EIN is then reported on all your applicable tax filing forms.

[prncota]

I currently prn in healthcare setting as well and I’m very interested in becoming an llc but do not know the steps to take to do so. I currently work for 6-7 different facilities and manage my own schedule, car, gas, phone, scrubs for different work places ,  etc and now allowed to claim any of these deductions on my taxes. What would be the best option for me to be able to claim these deductions since I am considered self employed? 

[Critter]

A single member LLC and a sole proprietorship are exactly the same thing ... both are entered on the Sch C as part of your personal tax return ... unless you decide to incorporate then you will file a separate business return.   Getting an EIN for the business is a good idea so you don't have to broadcast your SS# to all the clients you work for ... this way the 1099-misc is issued in the EIN. 

If you are new to being self employed and  acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-Misc for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed

Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 2017 SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.
 


PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
 
- 2. You expect your withholding and credits to be less than the smaller of: 
    90% of the tax to be shown on your current year’s tax return, or 
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

[prncota]

Wow thank you for taking the time to educate me on those facts. I greatly appreciate it and will continue to utilize all the information you gave me in the near future.