EIN

Differences Between SSN and Tax ID

Differences Between SSN and Tax ID

Differences between SSN and Tax ID

 

The social security number is used to track individuals for social security reasons and also can be used as a national identification number for tax purposes. SSN is used for opening a bank account, for applying personal credit, insurance, medical coverage and so on.

On the other hand, tax identification number – TIN – a tax ID is a unique number assigned to a single business entity to hire employees. It is something like an SSN for companies.

If you are an employee, you do not need to obtain a tax ID number. In case of starting a business, you may need to get a tax ID other than your SSN. However, it, as always, depends on the type of business you are starting.

An SSN identifies people, whereas an EIN identifies businesses. This is the main difference between them. In some cases, an SSN can be used instead of an EIN. We have already explained it.

You can use your SSN on behalf of your business if the following situations happened;

– A business owner wishing to hire employees

– Owning a cooperation

– Member of a partnership

– Keogh plan

– Involving with an organization like trusts, IRAs, NGO, farmer, cooperates and estates