Tax identification numbers, or TINs, are numbers the IRS uses for tracking purposes. In this article, we will go over the basics of tax identification numbers and the different types you may need to use.
TINs are nine-digit identification numbers the IRS uses. They are a way for the IRS to numerically keep track of taxpayers, whether they are individuals or entities. A TIN is a requirement for filing any type of tax return. Excluding social security numbers, all TINs are issued directly by the IRS.
Types of TINs
There are several different types of tax identification numbers. Which ones you will need to use will depend on your personal situation. Below we will review the different types of TINs and what they are used for.
1. Social Security Number (SSN)
This is the most common type of TIN. It is given to US citizens, permanent residents, and some temporary residents. You must have one to be legally employed and to receive social security and other government benefits. Additionally, a child must have one before their parents can claim them as a dependent on their tax return.
How to Apply: You must submit an application along with the appropriate documentation to the Social Security Administration. They will be the ones to issue the card with your number.
2. Individual Taxpayer Identification Number (ITIN)
An individual taxpayer identification number is a type of TIN for nonresident and resident aliens, their spouses, and their dependents. It can be utilized if they are not eligible for social security numbers. It has the same format as an SSN (XXX-XX-XXXX) but it always begins with a nine (9XX-XX-XXXX).
How to Apply: ITINs are issued by the IRS. To apply for one you must complete a Form W-7. You must submit the form along with supporting documentation to the IRS for processing.
3. Employer Identification Number (EIN)
The purpose of an EIN is to provide identifying numbers to corporations, trusts, and estates. It allows the IRS to track these entities for the purpose of reporting taxes. Additionally, banks will require one to open an account in the entity name.
How to Apply: You can apply for an EIN one of two ways. The first way is to complete an SS-4 and submit it to the IRS. The second way is to complete the online form on irs.gov. This allows you to receive the number immediately.
4. Adoption Tax Identification Number (ATIN)
Adoption tax identification numbers are only necessary for very specific situations. If you adopt domestically and have yet to receive the child’s SSN, you can apply for an ATIN. The ATIN will allow you to claim the child as a dependent on your taxes while waiting for their SSN. To qualify for the number the child must be a US citizen or permanent resident and adoption proceedings must be pending.
How to Apply: To apply for an ATIN you will need to use IRS Form W-7A. You must submit the form, along with the child’s placement documentation to the IRS for approval.
Utilizing Tax Identification Numbers
We all must utilize tax identification numbers. Some use more forms than others. But understanding their purpose helps us to better prepare ourselves for completing our taxes and protecting our identity.
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