Difference Between EIN and TIN
EIN vs TIN
TIN, or Tax Identification Number, is a nine digit number issued to companies for tax purposes, and this number represents the status of the company with the internal revenue services. This number is given to a company to make the issue of creating and taking care of the business at hand more effective and efficient. The difference between EIN and TIN is the way the company uses the identification number; if it is used for tax purposes, it is TIN, and if it is used for employment purposes, then it is called ENT, or Employer Identification Number.
The Revenue department has found a system by which it is able to look through millions of records of companies, and find them easily through the utilization of an identification number that represents who you are in the market, your present status, and yours and your employees’ tax dues.
Every company needs to have an Employer Identification Number at the time of registration. The process of obtaining an ENT is very simple, and a nominal fee of $75.00 needs to be sent to the related corporation to avail the number. You must provide a social security number to be able to apply for this service. This is now also possible online, and it is a very simple and quick procedure.
However, there are certain companies that do not need to register, or have an Employees Identification number, as they are working on a sole or partnership basis. This makes it difficult for people that wish to find information on all companies functioning in certain part of the country or state, through the listings of the Revenue department.
An EIN is required when you are starting your own business, and this is a mandatory requirement as per the rules of the US. You will also require an EIN to hire employees, if you are planning to have a regular or moderate business module which requires more than two people to run. You will have to have a record of their individual taxes, and you will need your EIN number for that purpose.
You also require an EIN to open a business bank account. The bank needs to create a special account for your business needs, and in case of any discrepancies, it is the duty of the bank to give proper records of the business at any time. If you are thinking of purchasing an existing business, you will also need to apply for an Employer Identification Number before the transfer of ownership is completed, to be able to verify your identification number.
However, many people tend to become extremely confused by both terms, and need guidance on the subject.
1. The basic difference between EIN and TIN, is that the Tax Identification Number is used for the tax purposes of the company, and when that same number is used to record the taxes of the employees, it is called EIN.
2. An EIN is required to hire employees, or start your business, but you don’t require a TIN for the same reasons.
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