Individual U.S. citizens carry unique social security numbers to identify themselves. The U.S. businesses are issued employer identification numbers, also referred to as EINs. EINs are unique, nine-digit numbers issued by the Internal Revenue Service (IRS) and primarily used to report employment taxes. You need to obtain an EIN number if you wish to trade or establish your business in the U.S.

The Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) to ensure undocumented immigrants pay the taxes even if they do not possess a Social Security number. ITINs allow the IRS to collect billions of dollars that the federal government would have no way of managing.The IRS created the ITIN in July 1996. Itwill enable foreign nationals and other individuals not eligible for a Social Security number (SSN) to comply with U.S. tax laws. The ITIN is a nine-digit number that always begins with the number 9. If you are an immigrant and wish to stay in the U.S., you need to obtain an ITIN number.

Merits of having an EIN: –

  • You are eligible to file business taxes and avoid various tax penalties. There are multiple penalties if you do not submit your tax by the end of the day. You can also avoid audits and penalties for personal room deduction in your offices and commercial complexes.
  • Employers need an EIN to set up their payroll, and the IRS will use the business’s EIN to track the payroll taxes. An EIN is necessary to register for your State’s employer taxes. It includes paying taxes for workers’ compensation and upholding income taxes on behalf of your employees.
  • Using an EIN instead of your Social Security number (SSN) will help keep your SSN more private.It reduces the risk of identity theft. It’s likely for someone or something to break into your accounts. If you’re an individual proprietorwithout an EIN, then giving out your SSN to clients or vendors can be risky.
  • Most banks demand an EIN to open a business banking account. A business bank account is a simple way to keep your finances and corporate finances separate. It simplifies the process of managing and tracking your corporate expenses.

Benefits of owning an ITIN number: –

  • It notifies the government of the United States regarding the financial assets of the immigrants. It ensures that they are obeying and paying the federal taxes.
  • It ensures and guarantees the government that the immigrants are contributing a part to the national economy.
  • It also helps them to apply for citizenship in the United States of America easily. It allows them to legalize their immigration status in the country.
  • It enables them to use and file for tax returns. The documents shall provide the required proof that the immigrants have a work-record in the U.S., thus making their citizenship easy.

If you wish to expand your ventures into the United States of America, you should consider obtaining an EIN. You can also have an ITIN number and apply for becoming a citizen in the United States.