What is the Difference Between TIN and EIN?
When you’re trying to file your taxes, both personally and for your business, all the different numbers can become overwhelming. All tax ID numbers serve the same purpose. They help the IRS identify an individual or a business for tax purposes. Every business and most individuals in the country have a unique number, which is why it can get confusing.
Where most people get confused is when they have multiple numbers. This generally happens when you own one or more businesses. When you own a business, you still have a personal tax ID number, but you also have one for your business. This is where TINs and EINs come into play. An EIN is an Employer Identification Number, which is a type of TIN. However, it’s not the only type of TIN.
The simplest analogy I can make regarding the difference between EINs and TINs is this:
All nickels are coins, but not all coins are nickels. In the same way, all EINs are TINs, but not all TINs are EINs. Make sense?
What is an EIN?
An Employer Identification Number, or EIN, is a type of taxpayer identification number. The EIN is a number assigned to a business for tax purposes. When you form a business, you will need to fill out paperwork to apply for an EIN. The IRS will assign one to your business, which will then be used on a variety of documents.
Your EIN is the identifying number for all your business bank accounts and tax documents. Depending on the type of business you have, you may or may not also use your personal Social Security Number on such documents. An EIN is designed to identify your business and also separate it from your personal records.
How to Get an EIN
The process for obtaining an EIN is very similar to that of any other TIN that you may need. However, in order to apply for one, you must also register your business. This can be done on your state’s business filing website. In the state of Florida, for example, the website is sunbiz.org. If you don’t live in Florida, you can find this information on the IRS website.
Once you file the articles of incorporation for your business, you will need to wait about 7-10 business days for your business registration to be approved by the IRS. Once that happens, they will contact you directly to provide further instructions. In some states, the EIN is automatically generated during this process. In others, you may need to print and “wet sign” a document and send it in to receive your EIN.
What is a TIN?
Taxpayer Identification Number, or TIN, is a broad term that is used to refer to a variety of numbers. All of these numbers are used by the IRS to identify individuals and entities for tax purposes. Depending on your situation, you may have one or more of these different numbers.
As previously mentioned, there are several different types of numbers that are considered to be TINs. Here’s a breakdown of the most common ones:
- EIN: Employer identification number
- ITIN: Individual taxpayer identification number
- PTIN: Preparer taxpayer identification number
- SSN: Social security number
- ATIN: Adoption taxpayer identification number
All of these numbers are TINs and they are each used for a specific purpose. For more information, the Federal Tax ID Numbers article goes into more detail about the differences and how these numbers are used.
How to Get a TIN
The Internal Revenue Service facilitates the creation and assignment of all TINs except the social security number. You can apply for your specific TIN via the IRS website, or with a physical application. Using the IRS website is the quickest way to apply for a TIN and begin the authorization process. However, if you prefer, you can download and print a physical application and mail it in. If you don’t have access to a computer or printer, you can visit your local IRS office to complete an application.
What is an ITIN?
An ITIN is a type of TIN that is reserved for resident aliens, non-resident aliens, and their families. It is a replacement for the social security number that they are typically unable to obtain. This number is used for tax purposes and does not impact immigration status.
How to Get an ITIN
To apply for an ITIN, you must fill out form W7, and an application for ITIN. Form W7 will request various pieces of information that help verify alien status. You will need information regarding each individual for whom you are requesting an ITIN, and each person will receive their own number. You may need to mail the information to the IRS, or deliver it in person to a walk-in office. Follow the instructions on the IRS website to complete this process.
ITIN vs TIN
An Individual Taxpayer Identification Number, ITIN, differs from a TIN in the same way – it is a type of TIN. When logging in to the IRS website to apply for a TIN, this will be one of the options available for you to choose. However, it’s much different than an EIN, and requires a certain set of circumstances to qualify.
Summary
Taxpayer Identification Number, or TIN, is an umbrella term that is used to refer to different numbers that might be used by the IRS for tax purposes. Knowing the differences between these numbers will help you and your tax preparer to provide accurate information when filing your taxes or other legal documents.
