Tax tip to prevent identiy theft

If you are a small business person operating as a sole proprietor, LLC or partnership then the IRS requires you to provide your business name and address and tax ID along with an attestation statement to anyone who pays you more than $600 during the year. The tax form used to provide this information of called a Form W-9.

The form has a field for social security number. I strongly suggest that you do not provide your social security number. Instead, provide a business tax ID number on the field directly below the social security number field on the form. This is not only legally permitted but significantly reduces the risk of identity theft.

A business tax ID number is available quickly and without charge from the IRS. Normally this is one of the first steps taken in setting up your business bookkeeping.

I find from experience that if a small business does not have a tax ID number issued then there are likely a number of other tax and legal oversights as well. In this case, I strongly urge you to talk to  a small business accountant to determine what else is missing.

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