By Jake Lawson, LLC Formation Strategist
TIN, SSN, EIN, ITIN, FEIN—sounds like someone spilled alphabet soup on IRS paperwork, doesn’t it? I’ve spent 15 years helping entrepreneurs navigate this maze of federal identification numbers, and I can tell you: understanding these acronyms isn’t just useful—it’s essential for anyone doing business in America.
Whether you’re a U.S. citizen forming your first LLC or an international entrepreneur breaking into the American market, you’ll need the right taxpayer identification number. Get it wrong, and you’ll face delays, rejections, and unnecessary complications. Let me break down everything you need to know about taxpayer IDs—the straightforward truth, no bureaucratic jargon.
The Umbrella Concept: What TIN Actually Means
Think of TIN (Taxpayer Identification Number) as the umbrella term that covers all federal identification numbers used for tax purposes. It’s not a specific number—it’s a category that includes several different types of IDs.
The TIN family includes:
- Social Security Number (SSN)
- Employer Identification Number (EIN)
- Individual Taxpayer Identification Number (ITIN)
- Plus some specialized numbers we won’t cover today
Why this matters: Every interaction with the IRS requires some form of TIN. Whether you’re filing taxes, opening business accounts, or applying for licenses, you’ll need the right type of taxpayer ID for your specific situation.
Real-world analogy: TIN is like saying “vehicle”—it could be a car, truck, or motorcycle. SSN, EIN, and ITIN are the specific types of vehicles you might need.
Social Security Number (SSN): The Original American ID
Your SSN is the granddaddy of all taxpayer identification numbers. What started as a simple way to track Social Security benefits has evolved into America’s de facto national ID number.
Who Gets an SSN
Eligible individuals:
- U.S. citizens (by birth or naturalization)
- Permanent residents (green card holders)
- Temporary workers with proper authorization
Format: XXX-XX-XXXX (9 digits with specific formatting)
Historical note: The first three digits used to indicate your birth location, but since 2011, the SSA uses randomized assignment. So no, you can’t guess someone’s birthplace from their SSN anymore.
Why SSN Matters for Business
Most Americans use their SSN for everything—taxes, banking, background checks, you name it. But here’s where it gets interesting for entrepreneurs:
Sole proprietorships: You can use your SSN for everything business-related
LLC owners: You have options—use your SSN or get a separate EIN
My recommendation: Get an EIN for your LLC even if you’re a single member. Why expose your SSN to vendors, clients, and partners when you don’t have to?
Getting an SSN
For immigrants: Apply in your home country through U.S. consular services when applying for your visa
For others: Visit a Social Security office in the U.S. (wait at least 10 days after arrival to ensure your information is in the system)
Processing time: 2-6 weeks for card delivery after approval
Employer Identification Number (EIN): Your Business’s Federal ID
The EIN is your business’s Social Security number—a unique identifier that separates your company from you personally. Despite the name, you don’t need employees to get one.
When You Need an EIN
Mandatory situations:
- Multi-member LLCs (required by federal law)
- Any business with employees
- Corporations and partnerships
Highly recommended situations:
- Single-member LLCs (for privacy and professionalism)
- Any business seeking loans or credit
- Businesses applying for licenses or permits
The EIN Application Process
Option 1: Online Application (Fastest)
- Available if you have an SSN or ITIN
- Instant approval during business hours
- Free through the IRS website
Option 2: Mail/Fax Form SS-4
- Required for non-U.S. residents without ITINs
- 4-6 week processing time
- Still free, just slower
Format: XX-XXXXXXX (9 digits with different formatting than SSN)
EIN Synonyms That Confuse Everyone
The government loves multiple names for the same thing:
- Federal Employer Identification Number (FEIN)
- Federal Tax ID Number
- Business Tax ID
- Tax Identification Number
They’re all the same thing. Don’t let the varying terminology throw you off.
Individual Taxpayer Identification Number (ITIN): The SSN Alternative
The ITIN exists for people who need to file U.S. taxes but aren’t eligible for Social Security numbers. It’s particularly important for international entrepreneurs and investors.
Who Needs an ITIN
Common scenarios:
- Non-resident aliens with U.S. tax obligations
- Dependents/spouses of U.S. taxpayers who aren’t eligible for SSNs
- Foreign investors in U.S. businesses
- International entrepreneurs with U.S. income
Format: 9XX-XX-XXXX (starts with 9, follows SSN formatting otherwise)
ITIN Application Process
Requirements:
- Form W-7 application
- Supporting documentation proving identity and foreign status
- Tax return or valid reason for needing the ITIN
Processing time: 6-10 weeks during peak season, faster during off-peak periods
Important note: ITINs expire if not used on tax returns for three consecutive years. Active use keeps them valid.
ITIN Limitations
What ITINs can’t do:
- Authorize work in the United States
- Provide eligibility for Social Security benefits
- Qualify you for Earned Income Tax Credit
What ITINs can do:
- Allow tax return filing
- Enable EIN applications (though online applications may be rejected)
- Satisfy tax compliance requirements
The Strategic Decision Matrix: Which ID Do You Need?
After helping 1,200+ entrepreneurs, I’ve developed a simple decision framework:
For U.S. Citizens and Permanent Residents
Personal taxes: Use your SSN
Sole proprietorship: SSN works, but EIN is recommended
Single-member LLC: Get an EIN for privacy and professionalism
Multi-member LLC: EIN is mandatory
Corporation: EIN is mandatory
For International Entrepreneurs
No U.S. tax obligations: EIN only (for your LLC)
U.S. tax obligations: Both EIN (for business) and ITIN (for personal taxes)
Planning to live in U.S.: Consider the path to SSN eligibility
Common Taxpayer ID Mistakes That Cost Time and Money
Mistake #1: Using SSN When EIN Makes Sense
The problem: Exposing personal SSN to business contacts and vendors
The consequence: Identity theft risk and unprofessional appearance
The solution: Get an EIN for business use, keep SSN for personal matters
Mistake #2: Confusing ITIN and EIN Requirements
The problem: Thinking you need an ITIN to get an EIN
The consequence: Unnecessary delays and applications
The solution: You can get an EIN without an ITIN using Form SS-4
Mistake #3: Ignoring ITIN Expiration Rules
The problem: Not using ITIN on tax returns for three years
The consequence: ITIN deactivation and compliance complications
The solution: Regular tax filing or formal ITIN renewal
Mistake #4: Wrong Application Method Selection
The problem: International applicants trying online EIN applications
The consequence: Rejections and processing delays
The solution: Match application method to eligibility (online vs. mail/fax)
Strategic Timing for Multiple ID Applications
When you need multiple taxpayer IDs, sequence matters:
Domestic Entrepreneurs
- Establish personal ID (SSN already exists)
- Form your business entity (LLC, corporation, etc.)
- Apply for EIN immediately after entity approval
- Open business banking with EIN confirmation
International Entrepreneurs
- Form your U.S. business entity
- Apply for EIN using Form SS-4 method
- Apply for ITIN (if you have U.S. tax obligations)
- Establish banking relationships after ID confirmation
Taxpayer ID Security and Privacy Considerations
Each taxpayer ID carries different risk profiles:
SSN Protection
High-risk uses: Business vendor forms, public business documents
Low-risk uses: Personal banking, tax returns, background checks
Best practice: Limit business exposure, use EIN instead
EIN Protection
Public nature: EINs appear on business documents and filings
Risk level: Lower than SSN, but still protect from unnecessary exposure
Best practice: Share only when required for legitimate business purposes
ITIN Protection
Similar to SSN: High personal identification value
Risk factors: Identity theft, unauthorized tax filing
Best practice: Treat with same security as SSN
The Banking Connection: How Taxpayer IDs Unlock Financial Services
Different taxpayer IDs enable different banking options:
Personal Banking
- SSN: Full access to consumer accounts and credit
- ITIN: Many banks accept for personal accounts
- EIN: Not applicable for personal banking
Business Banking
- EIN: Required for most business accounts
- SSN: Acceptable for sole proprietorships
- ITIN: Limited business banking access
Pro tip: International entrepreneurs often face additional documentation requirements regardless of taxpayer ID type. Research bank-specific policies before applying.
Tax Compliance: Which ID Goes Where
Understanding proper taxpayer ID usage prevents compliance issues:
Tax Return Filing
- Individual returns: SSN or ITIN
- Business returns: EIN (partnership, corporation)
- Single-member LLC: Either SSN or EIN (depending on elections)
Information Reporting
- 1099 forms: Use the ID associated with the tax return
- Employment forms: EIN for business, SSN for individuals
- Banking reports: Match ID to account type
International Considerations: Special Rules for Foreign Entrepreneurs
Non-U.S. persons face additional complexity:
Treaty Benefits
Tax treaties: May reduce U.S. tax obligations
ID requirements: ITIN often required to claim treaty benefits
Documentation: Additional forms and certifications needed
Beneficial Ownership Information (BOI)
New requirements: 2024 Corporate Transparency Act
ID needs: Various taxpayer IDs may be required for reporting
Compliance: Failure to report carries significant penalties
The Bottom Line: Choosing Your Taxpayer ID Strategy
After 15 years of helping entrepreneurs navigate federal identification requirements, here’s my straight advice:
For U.S. entrepreneurs:
- Keep your SSN for personal use
- Get an EIN for any business entity
- Protect both numbers appropriately
For international entrepreneurs:
- Get an EIN for your U.S. business (mandatory)
- Get an ITIN if you have U.S. tax obligations
- Plan for additional compliance requirements
For everyone:
- Apply for IDs in the right sequence
- Use appropriate application methods
- Maintain proper documentation and security
The taxpayer ID system might seem like alphabet soup, but it’s really just the government’s way of keeping track of who owes what to whom. Get the right numbers for your situation, use them properly, and you’ll navigate the system like a pro.
Ready to get your taxpayer IDs sorted? Check out our EIN application guide for step-by-step instructions, or explore our international entrepreneur resources for foreign-owned business guidance.
Have questions about which taxpayer ID you need for your specific situation? Drop me a line—I’ve probably helped someone in your exact circumstances and can point you toward the right solution.
Jake Lawson is an LLC Formation Strategist and founder of llciyo.com. He’s guided over 1,200 entrepreneurs through U.S. business formation and taxpayer identification requirements, including hundreds of international founders navigating the federal ID system.