Difference Between EIN and ITIN (Updated in 2023)

If you’re filing taxes, you might be wondering, what’s the difference between EIN and ITIN?

You want to be sure that you file taxes with the IRS correctly to save you time and money down the road, not to mention avoiding legal consequences.

However, you aren’t quite sure whether you need an EIN to file or an ITIN.

What’s the difference between an EIN vs ITIN?

Which one should you use to file taxes?

How do you apply for an EIN or ITIN?

Read below so I can answer all of your EIN and ITIN questions and clear up once and for all the difference between EIN and ITIN.

If you need help setting up your EIN or ITIN, I can make sure you do it the right way. Email me at sam@mollaeilaw.com as soon as possible to be sure you’re taken care of by a qualified business lawyer.

 

What is EIN

An EIN is a tax identification number for a business.

The acronym ‘EIN’ stands for ‘Employer Identification Number.’ This number is how a business is identified to entities like other businesses, banks, and the IRS.

Businesses need an EIN to set up a US bank account and operate within the US. You also need an EIN to hire employees, file taxes with the IRS, or conduct any other significant business financial undertaking.

It only takes 1-2 weeks to get your EIN from the date of application

 

What is ITIN

An ITIN is a tax ID that individuals use to file taxes who are unable to get a social security number.

‘ITIN’ stands for Individual Taxpayer Identification Number, and allows particular non-US residents, dependents, resident aliens and their spouses to file their taxes with the IRS.

These ITINs are formatted like a Social Security number and can be identified as always starting with the number 9.

You need an ITIN if you are not a US Citizen residing in the US and you have to file US taxes with the IRS.

The issuing of ITINs is not affected by the tax filer’s immigration status as any person regardless of this status might need to file or report taxes and income with the IRS per the Internal Revenue Code.

 

Difference Between EIN and ITIN

An EIN is for someone who is starting or already has a business, and an ITIN is for an individual and not a business.

If you’re a business owner who needs to file taxes and operate within the US, you’ll need to apply to the IRS for an EIN.

However, if you’re a person who is unable to file personal taxes with a social security number for any particular reason, you will need an ITIN.

If you have any questions about the differences between an EIN and an ITIN, send me an email at sam@mollaeilaw.com now.

What You Can do With EIN

There are certain circumstances in which you must have an EIN and a lot of benefits that come from your business obtaining an EIN.

The IRS says that your business must have an EIN if any of these are applicable:

• You have a Keogh Plan,
• You’re involved with particular organizations,
• Your business hires employees,
• Your business is a corporation or partnership, or
• You withhold taxes on income other than those wages a nonresident alien earns.

Additionally, you need an EIN in order to operate your business in these ways:

• File taxes with the IRS,
• Get a business permit,
• Hire 1099 contractors,
• Open a business bank account, or
• Apply for a business credit card.

Another great benefit of applying for and operating through an EIN is privacy. This is because if you give clients your social security number instead of using an EIN, you are much more likely to have your identity stolen.

Having an EIN doesn’t guarantee you won’t have your identity stolen but it will reduce the risk greatly.

What You Can Do With ITIN

An ITIN allows you to file taxes with the IRS if you are ineligible for a social security number.

These are the people who are eligible to file taxes with an ITIN:

• A US resident alien who is not eligible for an SSN that is filing a US Tax return,
• A spouse or dependent of a non-resident alien visa holder, and
• A spouse or dependent of a resident alien or US citizen.

Once you apply for an ITIN, it will take approximately 4-6 weeks to receive. Of course, if you apply for an ITIN during peak tax times, it could take up to 11 weeks so apply as soon as you know you will need an ITIN.

Do You Need EIN vs ITIN

You need an EIN to open a business bank account in the US, and that bank account can be used as proof to qualify and apply for an ITIN.

This ITIN will be used later for tax filing and business reporting requirements.

While it is true that businesses need an EIN and individuals need an ITIN, it is very likely that you will actually need both in order to fully comply with US tax laws.

I can set up either your EIN or your ITIN quickly and easily. Email me today at sam@mollaeilaw.com so I can help you.

How to Apply for EIN

Apply for your EIN here: https://einexpress.com/ein-without-ssn

 

How to Apply for ITIN

Apply for your ITIN here: https://einexpress.com/itin

 

Conclusion

Now that you understand the difference between EIN vs ITIN, do you still have questions about which one is right for you or how to use an EIN or ITIN?

After all, filing taxes and operating financially as a business within the US is extremely important and it’s crucial to do this correctly.

If you’re not sure how to apply for and use an EIN or ITIN, that’s when you contact a qualified business lawyer you know you can trust.

Send me an email at sam@mollaeilaw.com today so I can set up your EIN or ITIN correctly and put you on the road towards financial success.