Taxing authorities at all levels of government use a numbering system to identify taxpayers and track tax payments. You will need to use the number assigned to you for personal taxes and, if required, a separate number assigned to your business when you file tax returns and payments.
If you own real estate, your property will be assigned a parcel number by a local government office, such as a county assessor, to keep track of property information, including real estate taxes assessed and paid.
Tax Parcel and ID Number
Your personal taxpayer identification number is typically your Social Security number, which is issued by the Social Security Administration. This number is used on all tax returns filed with the Internal Revenue Service and, if necessary, your state tax agency for your personal taxes. If you do not qualify for a Social Security number, the IRS will issue an Individual Taxpayer Identification Number to you for use on your tax returns. State taxing authorities accept either your SSN or ITIN on state tax returns and other forms.
As a general rule, you must obtain a federal employer identification number from the IRS if you own a business. This number is used on the business' tax returns and other reporting forms as the taxpayer identification number for the business. An EIN is also used by estates and trusts that must report income to the IRS. A business owner who operates as a sole proprietorship or a single-member LLC can report business income on his personal return under his SSN. However, if the business has employees or must pay any federal excise taxes, a separate EIN must be obtained for the business. Unlike a personal taxpayer identification number, a separate state identification number might be required for your business in the states where it conducts business. Check with your state authorities for details.
A property ID number or parcel number, on the other hand, is assigned by county tax assessors or other local government offices to every plot of land within the jurisdiction. The numbering system used is unique to each locale and is often designed to convey information about the plot of land, such as the city and subdivision where the land is located. The parcel number is typically required to be on all important documents affecting the plot of land, such as a deed and property tax bills. In some cases there may be multiple parts to the property tax ID for your land. The system isn't standardized from jurisdiction to jurisdiction, so check with your city or county if you have questions about how it works where you own property.
Additional IRS Taxpayer Numbers
The IRS also requires you to obtain a separate taxpayer identification number in two other situations: adoptions and paid tax preparers. If you want to list as a dependent on your tax return a child or other U.S. citizen who you are trying to adopt – but cannot obtain an SSN for – you can use an Adoption Taxpayer Identification Number issued by the IRS. This is a temporary number to be used until the adoption is complete and you can obtain an SSN for the adopted person. Starting June 2011, the IRS required all paid tax preparers to use a Preparer Tax Identification Number issued from the IRS.
2018 Tax Law Changes
The 2018 tax law changes haven't fundamentally affected anything about how you use SSNs or other taxpayer identification numbers to file your taxes. If you have an ITIN and haven't used it in the past three years, it may have expired and you may need a new one for the current tax year.
Previous Tax Return ID Numbers
If you had an ITIN and got a Social Security number, make sure to inform the IRS. Use the SSN in all future correspondence. The IRS should transfer previous return data to your new number.