As a business owner or someone who is self-employed, you may have come across the terms EIN and SAN. These are important identification numbers that you need to know about. But what exactly are they, and are they linked in any way?
To answer the question simply, no, your EIN is not linked to your SAN. However, both numbers serve different purposes and are important for different reasons.
What is an EIN?
An EIN, or Employer Identification Number, is a nine-digit number issued by the Internal Revenue Service (IRS) to businesses operating in the United States. Think of it as a social security number for your business.
Your EIN is used to identify your business for tax purposes, such as filing business tax returns, paying taxes, and opening a business bank account. It is also necessary if you plan on hiring employees, as you’ll need to report their wages to the IRS.
What is a SAN?
A SAN, or State Administration Number, is a unique identifier assigned to businesses by state governments. This number is used to identify businesses that are required to register with the state for tax purposes.
Depending on your state, you may be required to obtain a SAN if your business is involved in certain activities, such as selling products or services that are subject to sales tax.
Why are They Important?
Your EIN and SAN are both important for different reasons. Here’s why:
- Your EIN is necessary for federal tax purposes and is required if you plan on hiring employees or opening a business bank account.
- Your SAN is necessary for state tax purposes and is required if your business is involved in activities that are subject to state tax.
- Both numbers are used to identify your business and are necessary for compliance with tax laws.
Can They Be Linked?
While your EIN and SAN serve different purposes, they can be linked in certain situations. For example, if you are required to register for a state tax permit, you may need to provide your EIN as part of the application process.
Additionally, if you are audited by the IRS, they may request information about your state tax filings, which could involve providing your SAN. In these situations, your EIN and SAN may be linked, but they are not inherently linked.
In summary, your EIN and SAN are important identification numbers for your business, but they serve different purposes and are not inherently linked. Make sure to obtain both numbers if required by law, and keep them in a safe place for reference when needed.