What are the Difference between EIN and ITIN or TIN?

What are the Difference between EIN and ITIN or TIN?

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.

A Taxpayer Identification Number abbreviated as TIN is a generic term used by the Internal Revenue Service (IRS) and it is a unique number used for tax and identification purposes.

Although TIN 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:

  • Social Security Number,
  • Employer ID Number,
  • Individual Taxpayer Number.

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)?

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?

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.

Difference Between EIN and ITIN: Which One Is Individual?

While learning about the difference between TIN and EIN, it is essential to distinguish between individuals and companies. In light of the information we have shared above, EIN is a number given to companies. On the other hand, ITIN appears as a number provided for the individual. In other words, individuals who want to be included in the US tax system without being affiliated with any business should apply for an ITIN.

However, some businesses have different processing that allows individuals to register with an EIN. In other words, in this case, the IRS can offer individuals the right to obtain an EIN. You can also request an EIN or ITIN in accordance with the general procedures of the commercial enterprise to which you will apply. For all these steps, you can get both consultancy and application services from us.

For more information about the difference between EIN and ITIN, you can visit the link below,

EIN vs. ITIN: What is the Difference?

If you want to obtain an EIN, ein-itin.com provides this service for you. All you have to do is submit your application through our website. We provide you with all the necessary steps for the online EIN application.