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Summary: A TIN enables tax authorities to track tax obligations and filings and ensures compliance with tax responsibilities as prescribed by law.
Tax Identification Number
A tax identification number (TIN) is a unique identifier assigned to individuals and entities for tax purposes. It enables tax authorities to track tax obligations and filings and ensures compliance with tax responsibilities as prescribed by law.
Who needs a TIN?
- Individuals who earn income require reporting on tax returns, such as employment and investment income
- Business entities like corporations, partnerships, and limited liability companies (LLCs) that have tax filing and reporting duties
- Estates and trusts with taxable income
- Others that are involved in activities that require a unique tax identification number, such as nonprofit organizations
What are the different types of TINs used in the US?
- Social Security number (SSN): This number is issued to individuals to track earnings over their lifetime and determine Social Security benefits.
- Employer identification number (EIN): This is issued to business entities for tax purposes.
- Individual taxpayer identification number (ITIN): An ITIN is assigned to individuals needing a US taxpayer identification number who do not qualify for an SSN.
- Adoption taxpayer identification number (ATIN): This number is temporarily issued to children being adopted in the US who cannot obtain an SSN in time for their adoptive parents to file tax returns.
- Preparer tax identification number (PTIN): Issued to tax preparers who must include their PTIN on returns they prepare.
How do individuals and businesses apply for a TIN?
- SSN: Obtain it through the Social Security Administration by completing Form SS-5 and providing necessary documentation such as a birth certificate and proof of identity.
- EIN: Apply online through the Internal Revenue Service (IRS) website or by mail or fax using Form SS-4.
- ITIN: Submit Form W-7 to the IRS, along with documentation proving foreign/alien status and identity.
- ATIN: Apply using Form W-7A.
- PTIN: Tax preparers can apply online or by mail using the designated IRS form.
Andrew (Drew) joined the Remote People team in 2020 and is currently Director, Regulatory Affairs. For the past 13 years, he has been a trusted advisor to C-Suite executives and government ministers on international compliance and regulatory issues. Drew holds a law degree from the University of Otago, a PhD from the University of Sydney, and is an enrolled Barrister and Solicitor of the High Court of New Zealand.
