Knowing the important of tax identification numbers is essential for you to file the taxes. When you are working with the tax forms, open new bank account or get enrolled into the retirement plan, you need to have the tax identification numbers with you. The shorter version is known as TIN. You will also need the tax identification number when you are operating a business of your own.
Here are some of the things which you need to know regarding the tax identification numbers which will surely help you out.
Who has it?
Every person has their own TIN which is assigned to them. They are given to the individual by the social security departments. Mostly when IRS has to look up for any information regarding an individual, they refer to the TIN.
It works the best when you have to know the information about an individual and their earnings. The TIN is on the tax forms, tax returns and many other documents which get used officially.
There are different types of TIN which you will be exposed to. Read through to know about the main three which are used in States for the individuals. These are the TINs which are used commonly and most of the population has it also.
Social Security Numbers (SSN)
You get to receive an eight digit number when you are residing in USA. The number is assigned to you from the Social Security Department and its administration. The format of the number is as following: abc-ab-abcd.
This is the main number which is provided to you and you have to mention it as well. It is better that you memorize this number and do not write it just anywhere. No one will be able to do anything with it but it contains all your personal and financial conditions.
You would never want anyone to know that except for the legal purposes such as when you are filing taxes or opening a business. You are able to use the SSN when you are about to establish the business.
Submit an application with the department which is under Form SS-5 and you will receive a card with the number of social security. You are able to work through this number as being the citizen of USA.
Employer Identification Number
This is the second type of TIN which people would be having. It has the same purpose but it is used for the business mostly. The format of this number is as following: ab-abcabca.
You have to apply for this number if you have the business established in USA or if you are about to.
You have to get the registration from it and by attaining this number, you are eligible for the business in USA. You can open up the business as corporation, LLC or partnership through this type of business.
Individual Taxpayer Identification Number
This number is issued to the people who are alien to US. It is given to the people who are there to visit or for temporary stay. The aliens which are not the permanent residents of USA. Such as if it is your parents, siblings or relatives visiting.
It is a nine digit number and the format is like the SSN. The people who have the ITIN are not eligible to work in US. They are not able to work over this number as they are present in the USA for a limited time. The form W-7 needs to be filled and submitted to the SSN department in order to attain it. If your relatives visit you regularly then know that you have to apply this number for them.
These numbers help you have a peaceful stay at USA so incase if you get stuck somewhere, you are able to provide this number. It helps you out and gives you a sense of protection. ITIN cannot be the substitution for SSN which is why it is necessary that you know what kind of TIN you are applying for.
