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What Type of Federal Tax Identification Number Does the Internal Revenue Service Need for my Taxes?

At O’Bryan Law Offices, we understand that the acronyms used by the Internal Revenue Service (IRS) can get confusing. If you’re confused about how your personal taxes and business taxes may differ, you really need to understand the differences between an EIN, TIN, and ITIN. These tax ID numbers are used by the IRS, but they’re all used for the same purpose essentially.

As the leading bankruptcy law firm in Louisville, Kentucky, we get a lot of questions in reference to tax identification numbers. So, we decided to put together this post in order to help those who are struggling with IRS acronyms and how to apply them to taxes. To learn more about how to fill out certain tax forms, give us a call at 502-339-0222 today.

TIN vs EIN Numbers

In order to understand how a federal tax identification number works, you’ll need to know the difference between TIN vs EIN numbers.

The IRS uses different acronyms to distinguish various types of tax IDs. Many people believe that a TIN and an EIN are one in the same, and to some extent, they are correct. A TIN is also known as a taxpayer identification number. This is the most general form out of the tax identification numbers.

In contrast, an EIN is an employer identification number. So, in layman’s terms, an EIN is a form of tax ID. But, a taxpayer identification number can describe other tax identification numbers besides an EIN.

To further explain the difference between an EIN and a federal tax ID number, we will start with the EIN number used by the Internal Revenue Service and then, clarify the differences.

Federal Employer Identification Number (EIN)

employer identification number

An employer identification number (EIN) identifies an individual business entity for tax purposes. An EIN works similarly to a Social Security number (SSN).

In order for a business entity to open a business bank account, apply for business licenses, or file your business tax returns, your business will need its own tax identification number.

So, the main difference between EIN and tax ID strictly relates to tax purposes.

An EIN is a nine digit number, written in the format: XX-XXXXXXX. For employee plans, a letter and the plan number may come after the nine digits.

EINs can apply to any of the following:

  • employers
  • partnerships
  • sole proprietors
  • corporations
  • non-profits
  • government agencies
  • estates and trusts
  • business entities
  • certain individuals

If you’re unsure of whether or not you have an employer ID number, you can always use the EIN search tool for businesses or EIN search tool for nonprofit organizations.

EIN Tax Laws: Employer Identification Number (SSN)

Not all business entities will need an EIN. A few exceptions do exist. Limited Liability Corporations (LLCs) and Sole Proprietors that don’t have employees may use the owner’s personal Social Security Number (SSN) in the place of an EIN when filing for taxes.

Sole Proprietorships

Technically, a sole proprietorship isn’t a legal entity. Therefore, the proprietorship doesn’t exist as a separate tax entity. So, sole proprietorship owners who don’t have employees can file taxes using their Social Security Number.

Limited Liability Corporations (LLC)

While an LLC does serve as a separate legal entity, it isn’t a separate tax entity. Business income passes through an LLC the same way it would a sole proprietorship. So, LLC owners can report their income on their personal tax return.

If an LLC doesn’t employ any workers, the owner of the LLC is viewed the same as a sole proprietor for the purpose of tax laws.

Taxpayer Identification Number (TIN)

taxpayer identification number

When determining the differences between TIN vs EIN, the TIN or tax identification number (TIN), can include all numbers that are used for tax reporting. As previously stated, all tax ID numbers have their own specific purpose.

Federal Tax ID Numbers include:

  • ATIN: Adoption taxpayer identification number
  • EIN: Employer identification number
  • ITIN: Individual taxpayer identification number
  • PTIN: Preparer taxpayer identification number
  • SSN: Social Security number

So, when you’re comparing TIN vs EIN, you’ll want to remember that an EIN is only one type of tax ID number.

Other Taxpayer Identification Numbers

TIN vs EIN seems to be what stumps most of those we speak with. However, as stated, there are other various types of tax ID numbers, and it is important to understand those, as well, as they could affect your taxes.

Adoption Tax Identification Number

An adoption tax ID (ATIN) represents a temporary tax ID that is designed for an adopted child that doesn’t yet have a Social Security number (SSN). Unlike the other forms of tax ID, an adoption tax ID is only meant to be used on a temporary basis.

An ATIN is necessary when:

  • You need to claim your adopted child on your tax return.
  • You are legally adopting a child either by domestic adoption or foreign adoption, and the child has a permanent resident card or certificate of citizenship.
  • You couldn’t get a Social Security number for the adopted child from the biological parents, guardians, or adoption agency.
  • The adoption isn’t yet final.

To get an ATIN, you must submit Form W-7A with the IRS.

Individual Taxpayer Identification Number (ITIN)

An ITIN is used by any individual who, for whatever reason, is disqualified from receiving a Social Security number. Most of the time, this applies to non-resident and resident aliens in the United States. This does include dependents and/or spouses who cannot get a Social Security number. Like a SSN it is a tax processing number with nine digits, in the format: XXX-XX-XXXX, but for any resident or non-resident alien who may need a tax number.

Preparer Tax ID (PTIN)

A preparer tax ID, or PTIN, is for a paid tax preparer or tax accountant to use when he or she prepares federal tax returns for other business entities or individuals.

Social Security Number (SSN)

Social security numbers are the most common type of individual tax ID. They are a nine digit number given by the Social Security Administration, written in the format: XXX-XX-XXXX.

For most people, their social security card is given to them by their parents. But, if you need to obtain a Social Security Number, you must fill out an SS-5 form through the Social Security Administration.

Our Bankruptcy Lawyers Can Help!

Everyone can be identified in a number of ways. We have Social Security numbers, Driver’s License numbers, passport numbers, and the list goes on. It’s easy to see how a person could get confused.

If you made a mistake on your federal taxes and are now struggling to make ends meet, whether you’re a small business owner, adoptive parent, or just a normal person trying to get by, the Louisville bankruptcy attorneys would love to walk you through the process of Chapter 7 or Chapter 13 bankruptcy. Call 502-339-0222 for a free consultation.


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