The Tax Identification Number (TIN), also known as the Employer Identification Number (EIN) or Federal Tax Identification Number, is used in the United States. The Internal Revenue Service (IRS) issues firms with this nine-digit number for tax purposes.
For tax purposes, such as submitting tax returns, paying taxes, and creating business bank accounts, businesses are identified by their EIN. Additionally, it is necessary for companies that employ people and pay taxes on their behalf.
The EIN has nine digits in the format XX-XXXXXXX, which is comparable to the Social Security Number (SSN). The first two digits identify the area in which the company is based, and the IRS assigns the next seven digits in order.
It’s crucial to understand that the first two digits of the EIN are not chosen at random when reading it. The IRS’s website lists the particular number ranges it has assigned to each geographical area. Businesses in New York State, for instance, have EINs with the first two digits ranging from 01 to 22.
In conclusion, the Federal Tax Identification Number (TIN) or Employer Identification Number (EIN) are both terms for the Tax Identification Number used in the United States. The Internal Revenue Service (IRS) issues firms with this nine-digit number for tax purposes. The first two digits identify the area in which the company is based, and the IRS assigns the next seven digits in order.