Employer Identification Number. EIN. In the US, it’s used to file taxes by those running a small business. I don’t know what they call it in other countries.
“But Katty,” you protest. “I don’t need one of those. I have my social security number.”
It’s true, you do have an SSN. And it’s also true that if you are running a business under your real name, like “Jane Waltzingoner, Author, LLC” in which you are the only owner, employee and unpaid intern, you are probably allowed to use your SSN to file taxes. It’s true.
And if by some twist of fate you become the World’s Most Awesomest Writer who makes so much cash from book sales you don’t need a day job, you’ll need to incorporate and get an EIN anyway, just so you can finagle with your taxes easier and get a few tax breaks. For the vast majority of us, this will not be a huge concern, but why not be prepared for the best?
Ahhh … but what if you use a pseudonym? Or multiple pseudonyms? Some companies will accept the pseudonym and pay out to the real nym after you load up your manuscript to foist upon the world in digital and print. Others will not. Others require legal documentation that you have at least properly filed a DBA in your state before they will even CONSIDER such a move. If you register a DBA in your state, many will issue an EIN without you incorporating into an LLC or an s-corp or what-have-you. Or you could just go straight to the IRS and get an EIN. Even if you don’t use a pseudonym, but proudly proclaim to the world and the in-laws to whom you will never be good enough that “I, Jane Waltzingoner have written these books,” you should really, seriously, deeply consider getting yourself an EIN.
“Katty, you’re boring the hell out of me.”
Sorry, sweetcheeks. This is what happens when you’re married to a computer security wonk. I don’t wear tinfoil undies to prevent the device implanted in my butt via aliens probing me from transmitting all my data (health, passwords and my super-secret queso recipe) or from receiving instructions from said government sponsored aliens that will load directly into my brain by route of the vagus nerve, but after you’ve been involved for a decade+ with a computer security geek, and spent quality time as a file clerk in a LAN shop that was also very concerned with computer security, you pick up a few things. A little paranoia is healthy.
You wanna have fun with a computer security nerd? Go to a store and buy one of those notebooks that are boldly, blatantly labeled “Passwords.” Every security nerd argues against having the same password for every single site. For those of us that take this advice, it’s fuck-near impossible to remember them all, so we have to document them somehow in a manner that’s easy to find. Especially if someone steals your purse or breaks into your house – they need to know where to look too to find your super-secret words of passage to get on your Ravelry profile.”Oh, thank God she wrote it all down in this convenient book labeled ‘Passwords’ laying right on her desk next to the laptop.”
All the security guys tell you that if you must document your passwords, then hide them in a not so obvious place (in the picture frame on your desk is sooooooooo obvious. Don’t go there.). Hard-core security wonks (like my husband) absolutely hate the idea of the written down passwords, the online password cache, the cloud, or any physical residence with windows and no Faraday cage (he doesn’t have one, although it’s on his Christmas list every year).
Seriously. Buy the notebook. Or just bring him along shopping next time and show one to him. The reaction is hilarious.
But we’re getting off-track here. Back to the original subject.
When you upload your manuscript to the various and sundry platforms across the universe, everybody asks the same question – “What’s the tax number for our files? We’re cutting you checks monthly/quarterly/whatever, and we send you tax papers every year so WE don’t get hung by the IRS. Therefore, we need to know your tax number, so we can rat YOU out to the IRS. If we have to suffer, so do you.” A Social Security is always accepted.
But what if said platform gets hacked by insidious evil-doers?
*snort* “Katty, you made my soda come out my nose.”
Sorry about that, but it’s true. Two years ago, Sony and Apple’s iCloud both thought they were safe and un-hackable. We all know how that turned out.
It’s only a matter of time before someone else gets nailed. Someone you actually give shit about. Someone like Amazon. Or Kobo. iBooks. Smashwords. Draft to Digital. Ingram Spark. Or some other site where you entrust not just your baby, but your tax number. Your identity.
“Katty, it’s time to change the tinfoil undies. They tell us when they get hacked.”
Yeah. AFTER they find out. Which sometimes can take weeks. Months. Or a year or two, depending on the sophistication of the hacking operation. No biggie.
“If they get my EIN, I’m still in the same identity theft boat, Katty. Duh.”
Worst case scenario: You close your business. Kattywampus Books is gone forever and ever. You file the correct documents to destroy your business identity. Close your accounts. Maybe visit with a lawyer to be sure everything was done right and someone doesn’t come after you to pay for the vacation in Aruba that you have no memory or photographic evidence of enjoying. Buy a black dress and mourn appropriately. Maybe hold a wake or two.
Then file new papers. For a new business name. With a shiny new EIN.
It’s a lot harder to get a new SSN than it is an EIN. I’m not sure the US government even issues new SSN’s for people in the Witness Protection Program. They sure as hell don’t just because someone stole it and used it to utterly destroy your financial and professional life in such a fashion that you’ll never recover.
Once again, it’s on you.