Introduction
So what is a Tax id number? Why do you a Tax id number? When you are an employer, who runs a business irrespective of the size of the business, you would have a set of employees working under you. So the employer needs Tax id. Tax identification number is a number that is used to identify a taxpayer. In short it is also known as tax id. Tax id is used by internal revenue services. Internal revenue services are also known as IRS. Internal revenue services use the Tax id administration work related to tax laws. Tax id can be issued by two government organizations. The internal revenue services (IRS) or social security administration (SSA).
Details
How is Tax Id number important for individuals? Tax id number is of high importance. It should be provided on returns and financial statements. All the tax related documents require Tax id. So in short your life will be stopped if you don’t have a tax id number.
How do I get a tax Id number? The next logical question is how do I get my tax id number? The process to get a Tax id is fairly simple. You need to complete a form SS-5 and application for a social security card. The social security card is also known as PDF. Beside this you must give proof of your self identity, age and citizenship of United States of American or law alien position. By this way you can get your Tax id. If you need more instruction regarding your specific case of Tax id, you can go to the social security web site. Free services are available at your social security office either by visiting the social security office or by calling in. It is not a long drawn process by any means.
Difference b/w ID and SSN
The Tax id number has nine digits in it. The internal revenue services use this to recognize the employer’s tax accounts. The Tax id number is different than the Social security number (SSN), but it considered as equal to ID. Tax id number is used when you are trying to reach a contract with the internal revenue services. The internal revenue services don’t accept the social security number.
The need of tax id for businesses
The need for Tax id number arises at different times according to the situation. When a sole proprietor or company is being incorporated, it needs a Tax id number. When employees are working under the company name, it then needs a tax id number. If the company decides to make profit sharing it requires a tax id number. If the company fails and records a file because of bankruptcy, it needs the tax id number. If the company purchases or over takes another business it also needs a tax id number. If the company has indulged into any trust working or stake a claim in real estate, start collaborating with any nonprofit organization, makes an mortgage investment, or corporate with farmers it needs a Tax id number.
