Standard TIN Matching Vs. Instant TIN Matching: Which One Fits Your Business?
With TaxBandits API, you get the flexibility to choose the TIN Matching services that fit the unique needs of your business.
Ever wish your tax compliance could move at the speed of your business while ensuring efficiency and accuracy? With TaxBandits TIN Matching API, it can!
Our API doesn’t just offer Instant TIN Matching for those who need quick results but also provides Standard TIN Matching for businesses that prefer bulk processing, even if it means playing a bit of a “wait and see” game. Whether you need results right now or can afford to wait, we’ve got you covered!
Let’s dive into how each of our TIN Matching services works and which one might be the best fit for your business.
TIN Matching — Basics
Before delving deeper into how our services, let’s understand the basics first. What’s TIN Matching?
TIN Matching is a service that verifies the Taxpayer Identification Number (TIN) provided by your payees (recipients) with the IRS records. This process is essential for ensuring the accuracy of 1099, W-2, and other tax filings. It ensures that the information you’re reporting is accurate, preventing any hiccups in your tax filings and keeping those pesky penalties at bay.
Note: With TaxBandits API, you can enable TIN Matching when collecting W-9s from recipients or separately if you already have the TIN data.
Our TIN Matching Services: How They Work
1. Standard TIN Matching
Standard TIN Matching is a method by which you submit a batch of TINs for verification. Once the IRS receives your submission, the combination of TINs and names provided in your request will be compared against what the IRS has in its database. If the records match, your TIN Matching result will be ‘Successful’; if not, it will be ‘Failed’.
Typically, getting the results via Standard TIN Matching takes around 24–48 hours.
How It Works
- Batch Submission: Use the TINMatchingRecipients/Request endpoint to submit your recipients’ list of names and TINs to TaxBandits API.
Note: If you prefer to opt for Standard TIN Matching while collecting W-9 from your recipients via RequestByEmail or RequestByUrl method, you can set the IsTINMatching node as True. If you use our Drop-in UI to collect W-9s, you can configure it to initiate TIN Matching automatically once the form is submitted.
- Processing: TaxBandits will submit your records to the IRS for the validation process. As mentioned earlier, it takes around 24–48 hours.
- Results: You can either configure webhooks for the event type ‘TIN Matching Status Change’ or use the Status endpoint to retrieve the results.
2. Instant TIN Matching
Instant TIN Matching offers real-time validation, making it possible to verify TINs on the spot at the click of a button. As soon as a TIN is submitted, it will be automatically checked against IRS records, and results are returned instantly.
How It Works
- Real-Time Submission: Let your system automatically call the InstantTINMatch/Request endpoint as soon as the recipient enters their TIN during the onboarding process.
- Instant Verification: The system will immediately check the TIN against the IRS database.
- Results: You can either configure webhooks for the event type ‘Instant TIN Matching’ or use the Status endpoint to retrieve the results instantly.
Which One Fits Your Business?
While both the TIN Matching services have their own benefits, it’s crucial that you pick the one that best fits your business use case.
Standard TIN Matching: A Steady, Efficient Option
This method is perfect if your business needs to verify a large number of TINs but isn’t in a rush and involves scheduled operations where a bit of waiting time is acceptable. Here are the benefits it offers:
- Batch Processing: Efficiently verify large numbers of TINs at once.
- Cost-Effective: Best for businesses looking to save on costs while maintaining accuracy.
- Dependable: Offers reliable results without the need for immediate feedback.
Use Case: Let’s say you’re running an online marketplace that connects freelancers with clients. You might onboard new freelancers every day but schedule payments for the end of each week. Standard TIN Matching lets you batch-verify all freelancer TINs at once, ensuring compliance without needing real-time results. This approach is both cost-effective and efficient, making it ideal for your business with planned payment cycles.
Instant TIN Matching: Speed When You Need It
This method is ideal if your business operates in a fast-paced environment where immediate verification is crucial, such as during the instant onboarding of new users or when processing time-sensitive payments. Here are the benefits it offers:
- Immediate Results: Verify TINs in a matter of a few seconds — no wait times.
- On-the-Spot Corrections: Lets the recipients quickly address any issues with the TIN, reducing delayed payments or filings.
- Flexibility: Offers flexibility for businesses that require real-time data validation during transactions.
Use Case: Let’s say you’re running a fintech software that allows users to sign up and start transacting instantly. You need to verify each user’s TIN as soon as they sign up to ensure compliance and avoid delays in processing their transactions. Instant TIN Matching offers the speed and accuracy you need to keep your platform running smoothly, allowing new users to start using your service without any hitches.
Conclusion
With TaxBandits API, you get the flexibility to choose the TIN Matching services that fit the unique needs of your business. Whether you prefer the reliable, cost-friendly approach or the fast and real-time results, our API ensures you’re always compliant and ahead.
