Different countries use various types of taxpayer identification numbers. In the US, several numbers are used, which can be used for specific purposes or interchangeably. If used incorrectly, the taxpayer may face unpleasant consequences in the form of penalties imposed by the US tax authority, the Internal Revenue Service. In particular, it is worth looking at the differences between TIN vs EIN. Here is few good information on the subject.
Different tax identification numbers in the USA
Various taxpayer identification numbers are used in the United States. The first of these, the TIN, is a taxpayer number that is assigned by the Social Security Administration or the Internal Revenue Service. The TIN defines a whole set of numbers for identification. They apply not only to tax returns, but also to other tax-related documents. TINs must be used for specific purposes. An important number is the EIN, which can be found under names such as Federal Tax Identification Number or Federal Employer Identification Number. This is the national insurance number for business activities.
The use of an EIN identification number
The EIN is used for operations such as filing tax returns, opening business bank accounts, as well as applying for licences and for opening business accounts. It can be used by employers, partnerships, trusts, corporations, government agencies and non-profit organizations. However, not every company needs to use it. The SSN, or Social Security Number, is also used in the tax system. This is a national insurance number consisting of nine digits that can be used by companies that do not employ any employees. It therefore applies to sole proprietors, as well as limited liability companies, or LLCs.
How can an EIN identification number be obtained?
An EIN can be obtained by several methods. The first is to fill out form SS-4, which can be sent to the office by fax. However, this is not the fastest way, as an EIN is issued in this case within 4–5 days. It is definitely quicker, within 1–2 days, to do this via the Internal Revenue Service website. An additional advantage is that here you can not only obtain an EIN number, but also check that all the necessary information has been sent and that the form does not contain any mistakes. Other ways are the traditional telephone contact and applying by post, but these are also the slowest methods and are therefore not recommended today.
Professional tax office services
Of course, to do business in the USA, you need to know a lot more than just the differences between TIN vs EIN. The tax system is extensive, and the information provided to government authorities must always be kept up to date. Otherwise, the taxpayer may be forced to pay a penalty or other surcharge. Therefore, a good solution is to use the services of a specialized tax consultancy such as INTERTAX. It offers comprehensive solutions for business in the USA. Cooperation with INTERFAX guarantees a flexible service and the efficiency of the measures taken. In this way, you can start your business in the USA without problems and focus on developing your products and services offered on the market.