While many people wait until January to begin preparations for tax season, you may need to start a little early if you are a new resident or if you are filling for a new business. Before you are able to file your taxes, you will need a Tax ID, or EIN, depending on your situation. Here is more on EIN and Tax ID Number information and importance:
What Is a Tax ID?:This is typically a nine-digit number that identifies an individual or business in the eyes of the federal government for tax purposes. For most Americans, the Tax ID coincides with the Social Security Number. If you are a non-permanent resident of the US, you can, and should, apply for a Tax ID if you are planning to work in the country. If you have misplaced your Tax ID, try looking at old tax forms or other government paperwork.
What Is an EIN?:An Employer Identification Number, or EIN is essentially a Tax ID for companies, rather than individuals. Every new company needs an EIN and that number will stay with the business throughout its lifetime. In some cases, you may need a new EIN if you are changing the type of your corporation for tax purposes. For instance, if you are going from a single owner business to a Partnership or Limited Liability Corporation, you may need to apply for a new EIN.
Getting a Tax ID: In most cases you can get your tax number online. Individuals who do not have a social security number can obtain an ITIN, or Individual Taxpayer Identification Number, by submitting form W-7. For corporations you can fill out an online EIN application.
Keep in mind that a new Tax ID for an individual or company can take several months, which is why you want to get started well before tax season.