TAX IDENTIFICATION (ID) NUMBER
For most individuals, their tax identification number is their Social Security number (SSN). It is used when filing tax returns and must be given to financial institutions, employers and other income payers so that appropriate information reporting forms can be completed. Failing to do so can result in a penalty or mandatory back-up withholding. A SSN is also required for a dependent, regardless of age, in order to claim the dependent’s exemption allowance and certain tax credits, such as the earned income credit. Nonresident or resident aliens may apply to the IRS for an “individual taxpayer identification number” (ITIN) if they are not eligible for a SSN. A special “adoption taxpayer identification number” (ATIN) may be obtained when a taxpayer is in the process of adopting a U.S. citizen or resident child and a SSN cannot be obtained; the ATIN cannot be used once the adoption is final – a SSN must be obtained for the child. Individuals who have household employees or who are self-employed with employees are required to obtain and use a Federal employer identification number (FEIN) as well. A self-employed taxpayer who has a Keogh plan must have an FEIN, even if no other person is employed in the business.
Leave a ReplyWant to join the discussion?
Feel free to contribute!