What is a Taxpayer Identification Number (TIN)?

taxpayer identification numbersA Taxpayer Identification Number, or TIN, is an identifying number either assigned by the Social Security Administration or the Internal Revenue Service. A TIN can refer to a Social Security Number, an Employer Identification Number, or other types of numbers. 

Not only are Taxpayer Identification Numbers necessary for paying taxes and opening bank accounts (for personal or business use), they are also important when establishing retirement or pension plans and any sort of trust fund. The bottom line is that the taxpayer ID number is the nine-digit number that many government and financial entities use for the purpose of identification.

Types of Taxpayer Identification Numbers

Social Security Number

The Social Security number (SSN) is assigned by the Social Security Administration. Individuals use the SSN on tax forms and other correspondence with the federal government. In business, sole proprietors who do not have employees may also use the Social Security Number as the tax ID for their business.

Individuals can apply for a Social Security Number by completing Form SS-5. They must also show proof of their identity, age, and status as a U.S. citizen or lawful alien. 

The Employer Identification Number

The Employer Identification Number (EIN or FEIN) is a nine-digit number in the following format: XX-XXXXXXX. This number is assigned by the Internal Revenue Service to employers who apply on Form SS-4Any business with employees must file for an Employer Identification Number to serve as the tax identifier for the business organization. For more information, read the article What is a FEIN?

Individual Taxpayer Identification Number

The Individual Taxpayer Identification Number is a nine-digit identifier starting with the number 9. The ITIN is only available to people who cannot get a Social Security number because of their immigration status. Certain people who are resident or nonresident aliens, as well as their spouses or dependents, may apply for the ITIN using Form W-7. For more information, read What You Should Know About ITINs.

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