Are you putting up a business and need a Tax ID for your Sales Tax? Or are you an employed individual who simply needs to file taxes? Either way, for you to be law abiding citizens and keep the IRS out of you tails, you should be getting Tax IDs.
If you are an individual who needs to pay his taxes, you need to get a Tax Identification Number (TIN), otherwise known as a Tax ID. You can get your Tax Identification Number issued by the Social Security Administration (SSA) or by the Internal Revenue Service (IRS).
How different is a Tax ID from a Social Security Number (SSN)?
An SSN is a 9-digit number issued by the government to identify your business or yourself, as an individual taxpayer. An SSN can be a form of Tax ID, but Tax IDs are not necessarily SSNs.
Do you need a Tax ID?
If you are an individual filing tax returns or any other tax related documents, you need to get a Tax ID. Same goes for businesses. For example, if you are in the business of selling goods and merchandise, you need to charge sales tax on the merchandise, and a corresponding Tax ID is needed for IRS to identify on which establishment the taxes are coming from. Basically, any kind of business which has employees and has taxes in any of its transactions should get a Tax ID.
What if I am not a U.S. Citizen?
In this case, you can file for an Individual Tax Identification Number (ITIN). It is a 9-digit number which starts with the number “9”. It is available for non-US Citizens such as:
- Non-resident aliens and spouses
- Resident aliens and spouses
- Any non-US citizen who cannot obtain a Social Security Number.
To apply for an ITIN, you must fill out IRS Form W-7 (IRS Application for Individual Taxpayer Identification Number). The purpose of this form is to validate your identity as well as your alien status in the United States.
Alternatively, foreign individuals should apply for a Social Security Number from the Social Security Administration, if permitted. The form to use is Form SS-5.
How much does it cost to apply for Tax ID or SSN?
No costs are involved in getting a TAX ID. These services are for free.
This is just a simple guide to give you an idea on how to get a Tax ID, and should not be the basis of your application. It is still best to check out the IRS Website to obtain the latest information on the procedure for requesting a Tax ID. Remember, if you are having second thoughts whether to get a Tax ID or not, it is best to just get one. It is easy to do and it shows that you are doing your duty as a citizen or resident of the United States.