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Differences between tax ID, EIN, ITIN, and SSN


Wayfrontier LLC

Differences between tax ID, EIN, ITIN, and SSN

If you are an entrepreneur, a business owner, or a worker who wants to do business in the United States, it's important for you to know the different types of tax identification available in that country. In the tax world, these identification numbers are essential for individuals and companies. In this article, we'll break down each of them in a simple and straightforward manner for you to understand.

What is a Tax ID in the USA?

The term Tax ID encompasses all the tax identification numbers we'll see below. That is, it includes SSN, EIN, and ITIN. Each one has a specific purpose and is issued according to the situation. Therefore, we will detail what they are and what each of them allows you to do.

What is an EIN?

The Employer Identification Number (EIN) is essential for businesses. Basically, we could say it's a company's ID used for tax purposes. This "ID" is assigned by the Internal Revenue Service (IRS) and consists of nine digits that identify a company.

What can I do with the EIN?

  • Open a commercial bank account.
  • File corporate tax returns.
  • Hire employees.

What is an ITIN?

The Individual Taxpayer Identification Number (ITIN) is similar to the SSN but for non-residents. That is, it is not used for employment or social benefits, only for tax returns, and is issued to foreigners who are not eligible for an SSN.

What can I do with the ITIN?

  • Comply with US tax laws.
  • File tax returns.

What is an SSN?

The Social Security Number (SSN) is a crucial identifier for US citizens and residents. This identifier is issued by the Internal Revenue Service (IRS) or the Social Security Administration (SSA). Also, it's important to mention that it is exclusive to US residents and consists of nine digits.

What can I do with the SSN?

  • Establish personal credit history.
  • Get legal employment.
  • Receive sickness and retirement benefits.
  • File taxes.

If you got confused and want to know in simpler terms who each of these identification numbers is intended for, here are the details:

  • SSN: For residents.
  • EIN: For businesses.
  • ITIN: For non-residents doing business in the United States.
  • Tax ID: The general term that encompasses all these numbers.