How to get a US Tax ID

I had been nervous about calling the IRS in the US to obtain an EIN. In the past I had sent ITIN documents to the embassy in Melbourne, and then sent them to the IRS, but it got rejected. Long process with disappointing outcome.

What’s the difference between an ITIN and EIN?

ITIN – Individual Taxpayer Identification Number

EIN – Employer Indentification Number

The ITIN is meant for individuals, and the EIN is for an employer. As we are selling our e-books we are technically sole traders, so therefore we can apply for the EIN which is a much simpler process than trying to get an ITIN.

Why did I need an ITIN or EIN? When you publish your e-book with Smashwords or Amazon they will withhold 30% tax. Providing a US tax number (either a ITIN or EIN) will reduce this to 5%.

 Let me tell you how I got my EIN in nine minutes.

 From my mobile, I rang 0011-1-267-941-1099.

I pressed ‘1’ as directed by the automated voice to connect with a consultant.

I told the consultant I was calling from Australia and wanted to obtain an EIN number. He asked if I had completed the SS-4 form. I said yes and that I had it in front of me. (This just meant that as he asked me questions, I had my answers prepared).

 If you don’t have an SS-4 form ready, below are the important questions they will ask.

 Are you a sole trader?
– Yes!

Reason for applying?
– To comply with IRS withholding regulations

When will date of business start?
– You can use the date you intend to publish your e-book

What is the principal activity of business?
– E-publishing (on the form it would be ‘other’)

What is the principal service/merchandise?
– E-books


Now that you’ve got your EIN it doesn’t end there.

For Smashwords – you can submit your EIN in the payment settings of your Smashwords account but you must then complete Form W-8BEN-E and send it to the US. Visit Smashwords to find the links to forms and more information.

(Smashwords distributes to ibooks, Barnes & Noble, Kobo, Baker & Taylor’s Blio. If you plan to upload directly to those retailers then you don’t need Smashwords.)

For Amazon – guess what? You no longer need a US tax identification number. When updating your account details you only need your Australian Tax File Number. 5% tax will still be withheld for purchases made by the US Amazon website, and there are some other tax agreements with other countries that we can’t get around, but we no longer need to worry about the 30% withholding amount.

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