What Is A Taxpayer Identification Number (TIN) & How To Obtain One
Every taxpayer files different forms during tax season and they use something called a TIN number to do this. This article will answer the question “What is a TIN number?” and explain its uses. You will also learn about the types of TIN numbers in the U.S. and how to obtain one.
What is a Tax ID number?
A Tax ID number (TIN number) is an umbrella term for the number assigned to identify taxpayers in the United States tax system.
To distinguish between taxpayer categories, such as individuals and corporations, a unique TIN is assigned. These TIN numbers are used when filing tax returns. For instance, a business entity would be assigned an EIN (Employer Identification Number). An individual wage-earner would use their SSN (Social Security Number). ITIN, ATIN, and PTIN are other types of tax ID numbers. We will explore what each of these is and how it may relate to you.
Is a TIN the same as an EIN?
TIN and EIN are sometimes used interchangeably, but all it means is that an EIN is just a type of TIN number. An EIN is issued by the IRS and stands for Employment Identification Number. It is only issued to business entities and organizations. If you own one of these and are asked to provide your TIN on a business tax form, it means to write in your EIN.
How To Get A TIN?
A Tax Identification Number is a unique 9-digit number that is assigned to anyone who files tax returns to the IRS. Other procedures may require your TIN as well, such as applying for a credit card. Sometimes, your employer may also request your TIN.
To obtain a TIN, you must identify first what type of tax form you are responsible to file. SSNs (Social Security Numbers) are issued by the Social Security Administration. If you would like to get an EIN, ITIN, ATIN, or PTIN, apply for one through the Internal Revenue Service (IRS).
Types of Tax Identification Numbers (TIN)
There are five types of tax identification numbers. Here’s a quick rundown of what each one does and how to apply.
The most popular tax identification number is the social security number (SSN). The Social Security Administration issues SSNs to individuals, including U.S. citizens, legal permanent residents, and some temporary residents who want to be legally employed in the U.S. SSNs can also be issued to children since their parents can claim them as dependents for tax purposes.
The format of an SSN is XXX-XX-XXXX.
Business entities and organizations must use an EIN except for sole proprietors. Also called Federal Tax ID Number or Federal Employer Identification Number (FEIN), it is a 9-digit number issued by the IRS. It serves various purposes, including filing taxes, applying for bank loans, hiring employees, applying for business permits, and other financial documents. Simply put, you cannot run your business without an EIN unless you are a sole proprietor (in which case you will file taxes with your SSN).
The format of an EIN is XX-XXXXXXX.
Are you applying for an EIN? Fill out Form SS-4 with all relevant business information and you will get your EIN once the information has been successfully verified.
An ITIN stands for Individual Taxpayer Identification Number. It serves as an alternative tax processing number for people who cannot obtain an SSN, such as nonresident and resident non-U.S. citizens, their spouses, or dependents.
To apply, complete Form W-7 and attach supporting documents to prove your identity. You can mail your documents in or present them at IRS walk-in offices. There are also IRS-authorized agents, called Acceptance Agents, who will assist you in reviewing your application documents and sending them to the IRS. The IRS website has a complete directory of Acceptance Agents inside or outside the U.S.
The ITIN begins with a 9 and has the format XXX-XX-XXXX like an SSN.
An ATIN stands for Adoption Taxpayer Identification Number. If a taxpayer wants to list their adoptive child as a dependent on their income tax return – or to claim child care credit – they can use the ATIN temporarily in place of an SSN. It functions as a temporary tax identification number in such cases where the adopting taxpayers are unable to get the child’s SSN for any reason.
As soon as it becomes possible, the taxpayers must obtain an SSN for the child, as the ATIN is automatically deactivated after 2 years. You can see the full criteria for applying for an ATIN on the IRS website.
An ATIN is formatted this way: XXX-XX-XXXX.
If you are an agent who provides your services in preparing and filing federal tax returns or other tax forms, you will use a Preparer Tax Identification Number (PTIN) issued by the IRS. Every individual who is compensated for their service must have their own PTIN. The purpose of a PTIN is to identify the person who has completed any tax form as they hold full responsibility for the accuracy of the return.
A PTIN has a P followed by 8 numbers: PXXXXXXXX.
Now that you know the different types of tax ID numbers, you can go ahead and apply. Be sure to check the relevant TIN issuing agency (Social Security Administrator or Internal Revenue Services) for the latest updated information.