Taxpayer ID Number

By Entrepreneur Staff


Taxpayer ID Number Definition:

A 9-digit number obtained from the IRS by a business with paid employees. If you're a sole proprietorship, your taxpayer ID number is your social security number.

One of the first steps you will take as a business owner is to obtain a taxpayer identification number so the IRS can process your returns. There are two types of identification numbers: a Social Security number and an Employer Identification Number (EIN). Since you most likely already have a Social Security number, let's address the issue of EIN numbers.

The EIN is a nine-digit number the IRS issues. It is used to identify the tax accounts of corporations, partnerships and other entities. You need an EIN if you have employees, operate your business as a corporation or partnership, or have a Keogh plan. Be sure to include your EIN on all returns or other documents you send to the IRS.

You can apply for an EIN through the phone, fax or mail, depending on how soon you need to use the EIN. If you apply by mail, be sure to send in Form SS-4 (Application for Employer Identification Number) at least four or five weeks before you need the EIN to file a return or make a deposit. If you apply by phone (toll-free at 866-816-2065), the IRS will give you one immediately. Before you call, the IRS suggests you complete Form SS-4 so you have all relevant information available. The person making the call to the IRS must be authorized to sign the form.

More from Taxes

Alternative Minimum Tax (AMT)

A separate tax system designed to keep high-earning corporations and individuals from reducing their taxes to a level that the federal government considers too low

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Employer Identification Number (EIN)

A 9-digit number obtained by a business with paid employees from the IRS. If you're a sole proprietorship, your EIN is your social security number.

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Medicare Taxes

The tax you withhold from your employees' paychecks to cover the cost of Medicare expenses

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Tax Deductions (aka Standard Business Tax Ded

The costs of doing business that are tax-deductible to the full extent of the law

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