The Difference between Your Social Security Number and Tax ID Number

When dealing with the IRS, it’s imperative that you have all of your documents and forms in order.

However, to ensure that your taxes are filed correctly, you need to have a tax ID. If you’re submitting for yourself, then you would use your social security number (SSN). However, if you have a business, then you will likely have to obtain a separate tax ID.

Today we’re going to look at the difference between the two, as well as how you can get one with www.govdocfiling.com and get the right tax ID form submitted.

Why Do I Need a Tax ID Number?

The IRS has to track your earnings over the year, and a tax ID number ensures that your statements are accurate when you file. Regardless of the kind of number it is, it will be a nine-digit code that the IRS uses to identify any entity.

For tax purposes, individuals are treated differently than businesses. When you’re born, or you become a citizen, you are issued a social security number. This number is tied to your personal finances, such as earnings from a job, a windfall from a prize (like the lottery), and other expenses related to yourself.

A company is a separate entity, and as such, it needs its own tax ID number. The earnings and expenses of the business are tied to that number.

Can I Use My SSN for My Business?

Only if you are a sole proprietorship can you use your social security number to file taxes for your company. Because you don’t have any employees and your earnings can only be claimed by you, it’s possible to use your SSN.

However, if you operate any other kind of entity, such as an LLC or a corporation, you will have to create a separate tax ID. In this case, it will be called an employer ID number.

Bottom Line

While your business tax ID and your SSN are used for the same purpose (filing and paying taxes), they are tied to different entities, so it’s imperative that you don’t mix them up.