What is a Tax Identification Number ID (TIN)?

If you looking to work in the United States and access the benefits or services offered by the government you need to obtain a Tax Identification number ID. With a TIN you will be able to run your day-to-day operations and report all tax returns.

To get started with this process, you need to learn what Tax Identification number ID is and how you can obtain one for yourself or your business. This piece offers a complete step-by-step guide on how to how to get tax id number with ease.

What is Tax Identification Number (TIN)?

A Taxpayer Identification Number (TIN) is an identification number used by the Internal Revenue Service (IRS) in the administration of tax laws, According to irs.gov. It is a one-of-a-kind number assigned to an individual, business, or corporation for tax purposes.

The Tax Authority usually issues the number, either online through the Joint Tax Board portal or via a letter to the Federal Inland Revenue Service office closest to your location. SSA issues the Social Security number (SSN) whereas the IRS issues all other TINs.

If you’re resident in California, you’ll find our article on ‘Income Tax for California‘ very useful.

Types of Tax Identification Number ID

  • Social Security Number (SSN)
  • Individual Taxpayer Identification Number (ITIN)
  • Employer Identification Number (EIN)
  • Adoption Tax Identification Number (ATIN)
  • Preparer Tax Identification Number (PTIN)

Social Security Number (SSN)

The most prevalent tax identification number is the social security number (SSN). The Social Security Administration issues SSNs to individuals who are U.S. citizens, permanent residents, or certain temporary residents.

To obtain legal work in the United States, as well as to receive social security payments and other government services, the SSN is essential. Before a parent may claim their child as a dependent for income tax purposes, they must have an SSN, which implies parents voluntarily apply for the number on their children’s behalf.

A dependant can be claimed if the youngster has an ITIN. The Social Security Administration (SSA) handles applications for free, but there are other fee-based services that help new parents finish their applications.

Your Social Security number is a unique identifier and can be misused by fraudsters. Ensure you only release it to those you are required to, including the IRS, employers, and lenders.

Individual Taxpayer Identification Number (ITIN)

When nonresident and resident aliens, their spouses, and their dependents are ineligible for Social Security numbers, the IRS issues an Individual Taxpayer Identification Number (ITIN) to them. The ITIN starts with a 9 and follows the same format as an SSN (XXX-XX-XXXX)

To obtain an individual tax identification number, the applicant must fill out Form W-7 and submit papers proving residency. Colleges, banks, and accounting firms frequently assist candidates in obtaining their ITIN.

Employer Identification Number (EIN)

The Employee Identification Number (EIN) is used by the IRS to identify companies, trusts, and estates that are required to pay taxes. Employer tax ID numbers are nine digits long, just like Social Security numbers, however, they are read as XX-XXXXXXX.

Those who meet the requirements for an EIN must apply for one and use it to record their earnings for tax purposes. It is free to apply for an EIN, and businesses can get one right away.

Adoption Tax Identification Number (ATIN)

The ATIN is only used in domestic adoptions when the adoptive parents are unable to receive the child’s SSN in time to file their tax returns. The child must be a U.S. citizen or permanent resident, and the adoption must be pending in order to qualify.

Preparer Tax Identification Number (PTIN)

The IRS began requiring the inclusion of a PTIN on all returns filed on January 1, 2011. Using the PTIN was optional prior to this date. Any tax preparer who charges to complete all or part of another person’s tax return must have and use the PTIN.

Why do you need TIN/EIN number?

TIN/EIN generally serves as a way to uniquely identify a business entity when a business entity’s actual name is unclear or difficult to distinguish from other businesses with similar names.  

Here are important reasons why you need TIN/EIN number

For Job Application

Employers want a Social Security number from everyone looking for a job. This is done to guarantee that the person is legally permitted to work in the United States. The employer issuing agency double-checks the data.

For State Agencies

 Businesses also require state identification numbers in order to file tax returns with their respective state tax agencies. The filer receives the I.D. number immediately from the state taxing authority.

For Credit

 On loan applications, banks and other lenders require Social Security numbers. This information is subsequently sent to the credit bureaus to check that the application is being filled out by the correct person. TINs—particularly SSNs—are also used by credit reporting companies to report and track an individual’s credit history.

Tax ID number example

An EIN has the following format: xx-xxxxxxx. An ITIN is a nine-digit number that always begins with the number 9 and is in the following format: 9xx-xx-xxxx.

How to get a tax id number

Firstly, use the IRS’s Interactive Tax Assistant tool. This will help determine if you should file an application to receive an Individual Taxpayer Identification Number (ITIN).

To obtain an ITIN, you must complete IRS Form W-7, IRS Application for Individual Taxpayer Identification Number. The Form W-7 requires documentation substantiating foreign/alien status and true identity for each individual.

You can send the documentation, along with the Form W-7 via email to the address shown in the Form W-7 Instructions, and present it at IRS walk-in offices.

Alternatively, you can process your application through an Acceptance Agent authorized by the IRS. Form W-7(SP), Solicitud de Número de Identificación Personal del Contribuyente del Servicio de Impuestos Internos is available for use by Spanish speakers.

The only entities authorized by the IRS to assist applicants in obtaining ITINs are colleges, financial institutions, accounting firms, etc. Their role is to review the applicant’s documentation and forward the completed Form W-7 to IRS for processing.

Foreign persons who are individuals should apply for a social security number (SSN, if permitted) on Form SS-5 with the Social Security Administration, or should apply for an Individual Taxpayer Identification Number (ITIN) on Form W-7. Effective immediately, each ITIN applicant must now:

  • Apply using the revised Form W-7, Application for IRS Individual Taxpayer Identification Number; and
  • Attach a federal income tax return to Form W-7.

Applicants who meet one of the exceptions to the requirement to file a tax return (see the Instructions for Form W-7) must provide documentation to support the exception.

New W-7/ITIN rules were issued on December 17, 2003. For a summary of those rules, please see the new Form W-7 and its instructions.

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FAQs on Tax Identification Number ID

To obtain an ITIN, you must complete IRS Form W-7, IRS Application for Individual Taxpayer Identification Number.




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