Does a Sole Proprietorship Need a Tax ID Number?

An employer identification number (EIN) is not needed for a sole proprietor without workers who do not file any excise or pension plan tax returns (but can get one if he or she wants to). The sole proprietor uses his or her social security number (rather than an EIN) as the taxpayer identification number in this case. However, if the sole proprietor hires an employee or is required to file an excise or pension plan tax return, he or she will need an EIN for the company and will not be able to use his or her social security number. If you already have an EIN as a sole proprietor and then become the sole owner of an LLC (Limited Liability Company) with workers, you must obtain a separate EIN for the LLC to file employment taxes.