Tax Identification Number (TIN) is a nine-digit number used by the Internal Revenue Service(IRS) to track the information on all the tax returns filed with the IRS. You can acquire all kinds of TINs from the IRS except the Social Security Number(SSN) issued by the Social Security Administration(SSA).
There are different Tax Identification Numbers(TIN)for example Individual Tax Identification Number(ITIN), Employer Identification Number(EIN), Adoption Tax Identification Number (ATIN) and Social Security Number(SSN).
ITIN is issued to non-US residents, resident aliens, their spouses and dependents to govern the U.S. tax laws for those businesses that are not U.S. residents. The string of numbers issued as TIN is similar to the SSN. However, it starts from the number 9.
As a business owner, you may require assistance to set up your business. It is also necessary to complete the registration process to get a Tax ID that matches your residential status. You are also required to perform the essential paperwork and business maintenance services. The link shared at the start of the paragraph will lead you to the best and cheapest business formation service. The service provider will provide you with worry-free compliance with all business-related services. In addition, it will guide you on how to raise finance for your business. You usually need to hire the services of a Certified Acceptance Agent (CAA) to apply for a TIN for your business.
Now, let’s move to the next step, how to get a TIN Number for your business Step-by-Step in 2022:
Step 1: Identify The Type Of TIN You Require For Your Business
Tax Identification Number is a broader term that includes all types of tax identification numbers issued by the U.S.The major categories include Social Security Number (SSN), Individual Taxpayer Identification Number(ITIN), Preparer Taxpayer Identification Number (PTIN), and Taxpayer Identification Number for Pending U.S. Adoptions (ATIN).
Now the question arises, when do you need TIN. TIN is required when your business is required to file a tax return and when obtaining a treaty benefit. TIN is also required if the business owner needs to claim an exemption for certain annuities and exemption for effectively connected income.
Step 2: Apply the TIN You Require For Your Business
You should apply for a TIN because it is essential to understand that you must complete the process of applying during the year before you have reporting and filing requirements. For example, for a non-resident U.S. business, it is necessary to complete Form W-7 to file your federal income tax returns. In addition, the tax returns filed in Form W-7 need to be submitted before the due date to avoid penalties.
Step 3: Get Required TIN For Your Business
After understanding your tax filing requirements, you can get a TIN for your business. The following information will help you get the required TIN for your business.
EIN is also known as a federal tax identification number. It must submit Form 1041, U.S. Income Tax Return for Estates and Trusts. Use this information which has income that is required to be reported.
You need to complete Form W-7 on IRS to obtain an ITIN. However, you cannot allege the earned income credit using an ITIN.
Adoption Taxpayer Identification Number (ATIN) is a nine-digit number issued by IRS. to assist the person who is legally adopting a U.S. resident child or person. You need to fill out Form W-7A to get ATIN. It is an application for Taxpayer Identification Number for Pending U.S. Adoptions.
To get a Social Security Number, you need to complete Form SS-5. In addition, you need to submit the evidence of your identity, U.S. citizenship and age along with Form SS-5.
The paid tax preparer uses Preparer Tax Identification Number (PTIN). The U.S. laws made it compulsory for paid tax preparers to register for PTIN using the new IRS sign-up system. To apply for PTIN, you need to use Form W-12, IRS Paid Preparer Tax Identification Number Application.
Step 4: Get TIN For Foreign Corporations
Foreign companies/businesses that are not individuals and want exemption from withholding are required to apply for federal EIN to claim the withholding. A tax treaty (claimed on Form W-8BEN) needs to submit Form S.S. for Employer Identification Number to the IRS to apply for this unique type of an EIN.
Step 5: Calculate The Time Required To Receive TIN
It takes at least seven weeks to receive your ITIN from the IRS. Then, the Internal Revenue Service(IRS) sends you a letter. The IRS assigns your tax identification number in this letter if your application is complete in all aspects and you qualify for ITIN.