Knowing what is tax identification number (TIN) in the US is vital for monitoring your taxation and several relevant aspects. The Internal Revenue Service (IRS) issues a TIN. It is a nine-digit number given to individuals and businesses for their taxation and employment concerns.
Types of TIN in the US
There are five types of TIN, the most well-known being the Social Security Number (SSN). However, several others cater to certain taxpayer groups.
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Social Security Number (SSN)
The Social Security Administration issues an SSN. It is crucial for qualified:
- Temporary residents
- Permanent residents
- Other US citizens
The format of the SSN is XXX-XX-XXX. To authorize your employment, SSN is used to access:
- Social Security benefits
- Other government services
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Individual Taxpayer Identification Number (ITIN)
The IRS issues an ITIN to those not qualified for an SSN. This usually pertains to resident and non-resident foreign nationals and their spouses and dependents.
ITIN always starts with the number nine and has the same format as an SSN. To prove residence, applicants must submit Form W-7 along with legitimate evidence.
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Employer Identification Number (EIN)
The IRS allots individualized EIN to different:
- Businesses of all sizes
- Corporations
- Trusts
- Estates
You need it to report income and file tax returns. The EIN is structured as XX-XXXXXX. It guarantees that corporate organizations pay their taxes.
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Adoption Tax Identification Number (ATIN)
When adoptive parents are unable to secure an SSN for the child, the ATIN is issued for domestic adoptions. While the adoption is pending, this temporary TIN makes including the kid on tax returns easier.
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Preparer Tax Identification Number (PTIN)
A PTIN is issued to tax preparers who prepare returns for compensation. In the process of tax filing, your PTIN guarantees:
- Transparency
- Accountability
When is a TIN Required?
Comprehending what is tax identification number helps you recognize the importance of streamlining your taxation operations, such as:
- Applying for credit
- Filing federal taxes
- Finding employment
Financial firms need TINs to complete loan and credit applications, and employers need SSNs to verify employment eligibility. State authorities also assign their own tax ID numbers to ensure local tax compliance.
Global TINs
TINs are used in several countries under various names. For example, Social Insurance Numbers (SINs) are used in Canada. However, TINs are issued in EU countries for taxation and investment monitoring.
Who Needs a Tax Identification Number?
A TIN is required for everyone working or filing taxes in the US. Businesses, trusts, and charitable organizations also need TINs to fulfill IRS requirements and obtain government services.
Are TINs Available Online?
TINs are sensitive information. Therefore, they are not made publicly available online. The issuing agency provides them directly.
Is a Taxpayer Identification Number the Same As a Social Security Number?
An SSN is a type of TIN frequently used for banking, tax, and employment purposes.
The Bottom Line
Comprehending ‘What is tax identification number?’ is a crucial prerequisite for employment and taxation legalities in the US. Having your specific TIN is equally crucial for individuals and businesses to ensure compliance with IRS regulations.
