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The Vital Differences Between TIN and EIN You Need to Know

By Arjun Mahadevan

Published on 12 Sep 2022 2 min read

If you are a new business owner, you might be wondering how your personal taxes and business taxes differ; it's important to understand the differences between EIN and TIN. Even though the IRS uses tax identification numbers for both business and personal tax recording purposes, the tax ID numbers are not the same for both.

Therefore, it is helpful to have a thorough understanding of what EIN vs. TIN is as well as how each identifier is used. If you want to learn more about EIN vs. TIN and which one is better for business accounting, keep reading, and we’ll tell you all you need to know.

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The Vital Differences Between TIN and EIN You Need to Know

The TIN (Taxpayer Identification Number) is the IRS federal identification number that all individuals and businesses must have to pay taxes. However, the EIN (Employer Identification Number) is the number used by business owners to report payroll taxes to the IRS.

The EIN is used exclusively by employers and businesses (whereas the TIN is a personal tax number used by individuals). If you are required to pay taxes, you must have a TIN as an individual. In case you are not required to pay taxes, there is no need to get a TIN.

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EIN tax considerations for businesses

Some businesses do not have to pay federal taxes. There are many businesses that do not have to pay taxes, including charities and other nonprofits, but it is essential to confirm the business tax status before setting up your business.

If your business is set up properly, you will not be required to pay taxes. For example, if your business is an S-corporation, LLC, a partnership, or a sole proprietor, you will not be required to pay taxes as a business.

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How to Obtain an EIN

To obtain an EIN for your business, you can contact the IRS and request for one. The IRS allows you to request an EIN by mail or via the toll-free, automated phone service. You can even apply for one online.

Once you have obtained an EIN, you can use the number for administering payroll taxes on your business. You will use the EIN for filing your business tax returns, for reporting wages and unemployment taxes, and for reporting self-employment taxes.

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How to Get a TIN

Getting a TIN (or SSN) is very easy. All you have to do is go to a Social Security Office or a U.S. Embassy or Consulate and present your documents to obtain a Social Security Number (SSN).

After you have obtained your SSN, you call the IRS and request a tax account number. When you call, you will be asked if you would want to obtain an EIN. When you give your consent, you will receive an application for an EIN.

The IRS will then send you a PIN number that you will use to obtain your EIN.

After that, you are required to complete an SS-4 form to indicate your name, your address, and your principal business or occupation, among other things.

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Conclusion

It is essential to understand that both TIN and EIN are tax IDs, but they are not the same. One is used for individuals, and the other one is used for businesses. It’s essential to know the differences between the two and how to obtain one of each.

We know there is more than just starting a company. As a founder, you don’t have time to waste on paperwork and other tedious tasks just to keep your company running. You have bigger goals. That’s where we come in. Doola handles all of that for you so you can get back to doing what you do best: growing your business. Let’s help you obtain your EIN in the US today!