What Are Federal Tax ID Numbers Used For?

What Are Federal Tax ID Numbers Used For?

Federal Tax Identification Numbers are used for opening a bank account or brokerage account, and for reporting withholding tax. A Federal Tax Identification Number is also known as an Employer Identification Number or EIN, and is equivalent to a social security number for businesses or corporations.

Federal Tax Identification Numbers are issued to individuals, organizations and businesses that are required to pay withholding taxes on employees. The number is used to identify a specific business or corporation tax account. Federal Tax Identification Numbers are also issued to other entities that include state or government agencies, limited liability companies, trusts, non-profit organizations and other businesses that use the number for identification purposes.