Every individual that works and resides in the U.S. has to pay income tax. All individuals irrespective of their legal status have to apply for and get ITIN number, SSN or EIN to pay state and federal taxes. Apart from paying taxes, these numbers are used for various other purposes such as opening a bank account, applying for credit cards, obtaining mortgage loans, and others.
A lot of people have confusion regarding whether they should get ITIN number, SSN or EIN. The following discussion will inform you about the difference between the tax numbers. You will also know whether you should apply to get ITIN number, SSN or EIN.
What is ITIN Number?
ITIN is an acronym of Individual Taxpayer Identification Number. The IRS uses ITIN number to identify and process tax paid by the individuals. You must get ITIN number if you are not eligible for SSN tax number. The ITIN tax number consists of number digit number that starts with the digit 9. The fourth digit of the ITIN tax number is either 7 or 8. Each ITIN tax number offered to individuals is different that uniquely identifies the individuals.
All nonresident and non-documented aliens must get ITIN number if they want to work in the country. Individuals also need to get ITIN number if they want to open bank accounts, obtain credit card, apply for mortgage loans, and various other reasons.
If you want to get an ITIN number you must submit a document Form W-7. You also have to submit documentary evidences with the form to validate your identity with the IRS.
What is EIN Number?
EIN number is an acronym of Employer Identification Number. The number is required by businesses that want to open a business in the U.S. The EIN number consists of 7 digits. (e.g. xx-xxxxxxx). You can apply for EIN number either with a SSN, an ITIN number, or just by opening a corporation, or LLC with your passport. The EIN number is issued by IRS to individuals who want to open business either as a private ownership, partnership, or corporation.
What is SSN Number?
SSN (social security number) is issued in the U.S. by SSA (social security administration). The number is similar to ITIN tax number but is issued to resident individuals who have arrived legally in the country. Individuals that are not eligible for SSN must get ITIN number to file the taxes. Similar to ITIN number, SSN numbers consists of nine digits and are in the form of xxx-xx-xxxx.
New IRS Announcement Regarding ITIN Number
In November 2012, IRS has announced that all ITIN tax numbers issued after January 1, 2013 would be valid for five years. Individuals who have obtained the ITIN number after this date must file a tax return at least once, every five years to keep their ITIN number active. The individual must use the ITIN tax number at least once in every five years of issuance; otherwise, it will be deactivated automatically.
If you have any further quarries related to applying for an ITIN number, please feel free to contact us at 888-509-3616. If you have any suggestions please share those with us as well. Freedomtax ITIN Number has a professional team of IRS Certifying Acceptance Agents, and tax accounting professionals with more than 17 years of experience, helping individuals get an itin number. Freedomtax can also help immigrant entrepreneurs incorporate a business in the USA. Freedomtax ITIN Number Online services; Quality, Professional Service with a Family Feel.