Quick Answer
Yes — you can run a sole proprietorship with an ITIN. You become a sole proprietor automatically when you do business on your own, so there's no state filing. You report profit on Schedule C of your Form 1040 using your ITIN and pay 15.3% self-employment tax once net earnings reach $400.
How Do You Start a Sole Proprietorship With an ITIN?
There's no formation filing: the SBA says you're automatically a sole proprietor once you do business on your own without registering another structure. With an ITIN, setup usually takes five steps: have your ITIN, pick a name and register a DBA if it isn't your own, get local licenses, decide on an EIN, and keep records for Schedule C.
- Have an ITIN. Your ITIN is the taxpayer number on your personal return. If you don't have one yet, see how to apply for an ITIN.
- Choose a business name. If you'll use a name other than your own legal name, register it as a DBA (trade name or assumed name) with your county or state.
- Get licenses and permits. Check your city, county and state for the licenses your type of work needs.
- Decide whether you need an EIN. It's free from the IRS and required only in the cases below, but banks and some clients ask for one.
- Keep business money separate. Track income and expenses all year so Schedule C and your quarterly payments are easy.
The SBA's business structure guide explains that a sole proprietorship has no legal separation between you and the business, which matters for the LLC question below.
Do You Need an EIN as a Sole Proprietor?
No, not unless you hire or owe certain taxes. The IRS requires an EIN if you have employees; pay employment, excise, or alcohol, tobacco and firearms taxes; or withhold tax on non-wage income paid to a nonresident alien, or set up a retirement plan such as a solo 401(k). Otherwise a sole proprietor can use an ITIN, though many banks ask for an EIN anyway.
The IRS lists these triggers on its EIN page. If you want one, the online EIN application is free and accepts an ITIN for the responsible party, as long as your principal place of business is in the U.S. It's open 6 a.m. to 1 a.m. Eastern on weekdays, with shorter weekend hours. Never pay a website for an EIN. Our ITIN vs EIN guide explains how the two numbers work together.
How Do Sole Proprietors File Taxes With an ITIN?
Sole proprietors report profit or loss on Schedule C and file it with Form 1040 under their ITIN. If net self-employment earnings are $400 or more, Schedule SE adds 15.3% tax: 12.4% for Social Security plus 2.9% for Medicare. If you expect to owe $1,000 or more, you also make quarterly payments with Form 1040-ES.
| Form | What it does |
|---|---|
| Form 1040 | Your personal return, filed with your ITIN |
| Schedule C | Business income, expenses and net profit |
| Schedule SE | Self-employment tax on net earnings of $400 or more |
| Form 1040-ES | Quarterly estimated payments when you expect to owe $1,000 or more (Form 1040-ES (NR) for nonresident aliens) |
| Forms 941 or 944, W-2, 940 | Payroll filings, only if you have employees |
The IRS lists these forms on its sole proprietorships page and explains the rate on its self-employment tax page, which notes you need an SSN or ITIN to pay it. People who are neither citizens nor U.S. residents for tax purposes aren't subject to self-employment tax, per the IRS's guidance for nonresidents, but most ITIN holders who live in the U.S. are residents for tax purposes and do owe it. For deductions and quarterly planning, see self-employed taxes with an ITIN.
Do You Need a DBA or a Business License?
You need a DBA only if you do business under a name other than your own. The SBA says most states require you to register a DBA, also called a trade name or assumed name, if you use one. Licenses and permits come from your city, county or state and depend on your work, such as food, construction or retail.
The SBA's licenses and permits guide suggests starting with your Secretary of State's website, then checking your county and city. Some state and local tax registrations, such as a sales tax permit, ask for a taxpayer number; an ITIN or EIN is what you'll have.
Is a Sole Proprietorship or an LLC Better With an ITIN?
Both work with an ITIN; the difference is liability. A sole proprietorship costs nothing to start but leaves your personal assets exposed to business debts, while an LLC costs about $100 to $300 to form in states such as Wyoming and Texas and generally limits that exposure. Both report profit on Schedule C by default.
A sole proprietorship fits small, low-risk work you're testing out. If you sign contracts, rent space or take on debt, compare the costs and steps in our guide to forming an LLC with an ITIN.
Can a Sole Proprietor Open a Business Bank Account With an ITIN?
Yes. A sole proprietor can open a business account, and many banks ask for an EIN for the business plus your ITIN as the owner, along with a government photo ID and any DBA certificate. The EIN is free from the IRS in one online session, so get it before you go to the branch.
See which banks take an ITIN in our business bank account guide. Once the account is open, you can compare business credit cards that accept an ITIN.
Does a Sole Proprietorship File a BOI Report?
No. FinCEN's final rule, in effect since August 14, 2026, exempts companies created in the United States from beneficial ownership reporting. A sole proprietorship isn't a separate entity formed by a state filing in the first place, so there's nothing to report. Be wary of letters or emails demanding BOI filing fees.
Check the current rules on FinCEN's beneficial ownership information page.
Can You Work as a Sole Proprietor Without Work Authorization?
No federal form asks for work authorization to start a sole proprietorship, and federal I-9 checks apply to employees, not to independent contractors. But clients can't knowingly contract for unauthorized labor under 8 U.S.C. 1324a, so whether you may do the work yourself depends on your immigration situation. Talk to an immigration attorney before you start.
Paying tax on business income with an ITIN doesn't give you work authorization or any immigration status. For how freelancing and contracting work with an ITIN, see freelancing with an ITIN and our jobs and work guide.
Frequently Asked Questions
How much does it cost to start a sole proprietorship with an ITIN?
Nothing at the federal level: there's no formation filing, and an EIN from the IRS is free. You may pay a DBA registration fee if you use a business name other than your own, plus any license or permit fees your city, county or state charges.
Can I give clients my ITIN on Form W-9?
Yes. The IRS's Form W-9 instructions say individuals who have an ITIN must provide it on the form, with the name exactly as it appears on their Form W-7. Clients use it to report what they paid you. The W-9 is for U.S. residents for tax purposes; nonresident aliens give Form W-8BEN instead.
Does a sole proprietorship file its own tax return?
No. The business doesn't file separately: you attach Schedule C and, if you owe self-employment tax, Schedule SE to your personal Form 1040 filed with your ITIN.
Can I hire employees as a sole proprietor with an ITIN?
You'll need an EIN first, then you file payroll returns such as Form 941 or 944 and give each worker a W-2. Employers must also complete Form I-9 for each new hire, so every employee needs U.S. work authorization.
Does being a sole proprietor change my immigration status?
No. Running a sole proprietorship and paying tax on its income doesn't give you work authorization, a visa or any other immigration status. Ask an immigration attorney how running a business fits your situation.