The difference between EIN and ITIN can be confusing. If you are planning to start a business in the US, which means you will generate sales and receive payments, the terms EIN, SSN, and ITIN will come up frequently. Therefore, it is helpful to learn what they mean.
In this guide, you can find all the details you need to know about the difference between EIN and ITIN, so you can decide for yourself what you need.
Contents
What is the ITIN Number?
Although ITIN numbers can be used for identification, they are primarily used to track payments to individuals for federal income tax and other tax purposes.
There are three general types of taxpayer ID numbers:
| Taxpayer ID Numbers | Abbreviations |
| Social Security Number | SSN |
| Individual Taxpayer Identification Number | ITIN |
| Employer Identification Number | EIN |
Let’s take a closer look at the comprehensive definitions of these concepts and the difference between EIN and ITIN.
What Is SSN (Social Security Number)?
A Social Security Number or SSN is the most common identifier for personal identification and tax purposes. All social security numbers are unique and personalized. With SSN, you can open a bank account or take other basic business steps in the US. For example, an SSN is also required for people who want to rent a house or get postpaid services.
You must also know the term SSN to have information about the difference between EIN and TIN.
What Is EIN (Employer ID Number)?
EIN is short for Employer Identification Number. The EIN, a 9-digit number, is issued by the IRS to identify a business entity. In short, every business that wants to operate in the United States must have an EIN.
In addition to the above information, the IRS can easily track taxes via the EIN. At the same time, business owners declare this number when requesting a loan or business bank account on behalf of the company.
What Is ITIN (Individual Taxpayer Number)?
“What is a itin?” To understand the difference between EIN and ITIN, it is essential to know about ITIN. An ITIN is a number issued by the IRS to people living in the US who do not have an SSN. For example, foreign national students, professors, or other employees residing in the USA must be given an ITIN. However, ITIN does not provide any legal immigration status or work permit privileges to the individual.
ITIN is a term also known as TIN (taxpayer identification numbers). It is one of the essential US-based official applications such as tax identification numbers and social security administration.
What is the Difference Between EIN and ITIN?
“Is tin and ein the same?” Employer ID Number (EIN) is a business’s federal tax identification number. Although it is an identifier for employers, you do not have to have employees need an EIN.
Individual Taxpayer ID Number (ITIN) is a nine-digit number and number issued by the Internal Revenue Service (IRS) and assigned to individuals who must have an identifying number but who are eligible for neither a Social Security Number nor an Employer Identification Number. (Difference between EIN and ITIN)
ITINs are for reporting purposes only and are not available for identification purposes. Let’s say you have a single partner LLC or sole proprietorship and do not have to apply for an EIN. You can use your Social Security Number for tax transactions. However, most single-partner LLCs and sole proprietorships obtain an EIN to separate their companies and their tax liabilities. So, An EIN looks more professional than an SSN when doing business with third-party companies and contractors.
As a result, the EIN also gives information about your company whereas the SSN provides information about you. Thus, using an EIN is better than using an SSN to avoid the risk of personal identity theft. We hope that the difference between EIN and ITIN is summarized.
The Main Difference Between EIN and ITIN
When it comes to the difference between EIN and ITIN, there is an important detail that comes to mind. Although EIN has taken on the role of a taxpayer ID number, its purpose is for companies. In other words, it may not always be possible to give a positive answer to the question “Can I use ein instead of itin?”
When it comes to the difference between EIN and ITIN, it is necessary to know that ITIN is an individual option. Although in some cases decisions regarding the company can be made with ITIN, it will not be possible to use ITIN if the company grows.
What is the Main Purpose of Ein or Tin Number?
After discussing the details about the difference between EIN and ITIN, we wanted to take a closer look at EIN. Here are some things you can do with EIN:
- You can open a bank account in the name of a company.
- You can apply with an EIN when applying for a loan for a company
- You can hire employees for the company.
- You can file federal taxes.
Frequently Asked Questions
This part of our guide contains some frequently asked questions about the difference between EIN and ITIN.
What is the Most Important Difference Between EIN and ITIN?
The most important difference between EIN and ITIN is that EIN is a company number, while ITIN is an individual tax ID number.
What is the Difference Between Tax ID and ITIN?
The difference between Tax ID and ITIN is that ITIN is processing as an individual tax ID. Tax ID is a concept that includes ITIN.
How to Get ITIN for Non Resident?
Another detail that needs to be known about the difference between EIN and ITIN is the ITIN application. You do not have the right to apply online when applying for ITIN. Instead, you can apply to the service IRS by mail or get support from ein itin .com.
