tax id

Filing a Tax Return with an ITIN Number

Earning money in the US, poses an obligation on you, to pay taxes. To find out the amount of money which you have to pay in terms of taxes, you need to file a tax return. The residents of the country are therefore, required to file their taxes with the help of the Social Security Number (SSN) issued to them. But if you are a non US resident, studying or working there, you are not eligible for an SSN. However, you still need to file your taxes in compliance with the US tax laws. Here are a few questions that may come in your mind while filing a tax return if you are an immigrant in the US.

Why should you file a tax return if you are an undocumented immigrant?

According to US tax laws, all undocumented immigrants of the country also have to pay taxes on the money they earn. If you don’t pay an income tax, you are breaking the law. In addition, you may not be able to take advantage of a few benefits. For instance:

  • You can get a tax refund, at the end of a financial year, if the annual income tax you owe is less than the sum of withholding and estimated taxes you paid. But this is only possible when you file your tax refund in a timely manner, every time.
  • Paying your taxes establishes your good moral character within a country. So, if you pay your taxes properly, you can earn a better chance of becoming a resident of the US in the future.

How can you file a tax return without a social security number?

By law, it is necessary to have an identification number for income tax returns. SSN is used for this purpose by legal US residents. Non-residents aliens or foreigners, who work in the country and have an obligation to pay taxes; need to therefore, apply for immigrant individual taxpayer identification number (ITIN), which serves a purpose similar to that of the SSN when it comes to filing tax returns. ITIN is issued by the US Internal Revenue Service (IRS); an organization responsible to collect taxes. This number is used for paying taxes only.

How to apply for an ITIN?

In order to get your ITIN, you need to fill in a tax return first. Then fill in Form W-7 issued by the IRS. Attach the application with the tax return. The IRS also requires a few documents as proof of your identity. Thus, with the application, you need to submit your original passport, birth certificate and certified copies of some other documents. The documents attached must be recent and one of them must have your photograph.

You need to submit this application and the documents with the tax return to the IRS, and after around 60 days, your original documents will be returned to you safely.

What else an ITIN can be used for?

Your individual taxpayer identification number is not a validation of your legal identity. It is specifically designed for tax purposes. However, you may use it to open an interest bearing bank account or apply for a home loan. Some states also accept it to make your driver’s license.

So, if you are a non-resident alien in USA, you should get an ITIN to enjoy maximum benefits as a tax-paying immigrant.

ITIN – A Powerful Tool for US immigrant Taxpayers

In obedience to strict US tax laws, every one living and working in the country has to file a federal income tax return. The US government provides legal tax identification for this purpose. US citizens use their social security number on federal tax returns as their tax identity. But if you are an undocumented US immigrant, you need to get an individual taxpayer identification number (ITIN) from the Internal Revenue Service (IRS).

IRS issues ITINs to be used only for tax processing purposes. Any other use of this number is not legally approved by the government. You should know that an ITIN does not provide legal verification of your status in the US nor does it authorize you to legally work there. However, you may get some added benefits while intending to use an ITIN for tax processing.

Why Do You Need an ITIN?

  • First of all, it provides you with a valid tax ID that is required to file a US federal income tax return.
  • It shows that you are obeying the US tax laws.
  • Paying taxes properly is the best way of showing that you are contributing to the economy of a country.
  • If you want to be a citizen of the US in the future, having an individual taxpayer identification number and filing a tax return can help establish your good moral character in front of the government.
  • You can also use tax returns to document your work history and prove your physical existence in the USA for many years, if required in any case.
  • If you file your tax returns regularly in compliance with the US tax laws, then you become eligible for economic support or tax refunds like child text credit.
  • As an immigrant worker, if you receive any settlement payment (due to a work-related dispute) or non-wage payment (for any punitive damages), you will be subjected to maximum withholdings rates. But if you are an ITIN holder, you can enjoy reduced or no tax withholdings as these are based on workers’ families and the number of exemptions they claim.
  • Although the IRS issues ITINs for tax purposes, you may use it as proof of your identity while opening an interest-bearing bank account, or for taking home loans.

Is it Safe to Use an ITIN?

It is a question that arises in the mind of every undocumented immigrant who wants to apply for an individual taxpayer identification number. Luckily, the answer is yes. The Internal Revenue Service, responsible to issue tax identification numbers to undocumented immigrants, has a powerful protection system. This system ensures that any information collected by the IRS will not be shared with other US agencies. However, if ordered by the court, this information can be shared with the US Treasury Department for tax administration or with other federal agencies for criminal investigations.

What is the barrier to get an ITIN?

If you want to get an ITIN, you need to submit an application Form W-7 to the IRS attached with a valid US tax return. You also need to submit your original documents like passport or birth certificate. If you are not able to submit the original documents, the IRS asks you to submit their certified copies by the issuing agency. This is a difficulty many applicants face while obtaining an ITIN.

However, obtaining an individual taxpayer identification number can prove to be a powerful tool for undocumented immigrants, provided they fulfill the requirements of the application process.

Common Mistakes that must be Avoided While Applying for an ITIN

Individual taxpayer identification number serves as a valid form of tax identity required by every single person residing in the US. An ITIN is assigned by the Internal Revenue Service (IRS) to those who do not qualify to get a social security number.

Individuals who have valid tax filing requirements and are not eligible for a SSN; they must apply for an ITIN. The application form is available on the internet or you can get it from the IRS office. Form W-7, an application for individual taxpayer identification number, needs to be filled in carefully; otherwise your application can be rejected.

If you are going to apply for your ITIN and you have already taken Form W-7, just go through some common mistakes that people make while filling in the form. Avoiding these mistakes will help you in submitting an error-free ITIN application to the IRS.

What are these Mistakes?

  1. You need to submit a separate application form to obtain ITINs of any dependents or spouse for whom you want to claim an exemption on your tax return.
  2. Don’t attach notarized copies of your documents with ITIN application as they are no more accepted by IRS. You are instead required to submit your original passport or birth certificate as a proof of your identity. If you cannot submit the original, then copies of your documents certified by the issuing agency are also acceptable.
  3. People often leave spaces empty in the forms if they don’t have anything to write in a particular column. Avoid doing this mistake by filling in the form completely. You should write ‘N/A’ in the space where no information needs to be provided.
  4. You need to consider the format in which you write the date. We normally write dates in date/month/year style but ITIN application form requires you to mention all the dates in month/date/year format.
  5. If you have a citizenship of more than one country, you need to write the names of both countries separated by a slash. Don’t write abbreviations for any country name.
  6. If you need to obtain an ITIN for an applicant who is under 14, the parent or guardian would have to sign the application form on their behalf. Be sure to mention the name of the parent or guardian in the section of the form where the name of the delegate is required. You also need to mark the relationship of the applicant in the same column. Those applicants, who are above 14 years, must sign their forms themselves.
  7. Before providing you with an individual taxpayer identification number, the Internal Revenue Service demands a proof of your “Foreign Status” or “Identity”. Submitting your original passport (or a certified copy of it) is enough to prove your identification. But in case your passport has expired or you fail to submit it to them, then you need to attach at least two documents mentioned in requirement list with your application and at least one of them must have your photograph.

ITIN application form must be filled completely and without any error. If you find it difficult to understand or fill in the form yourself, you can go to IRS certified acceptance agents or tax experts who help people in successfully obtaining their individual taxpayer identification numbers.

If you want to apply for an, Individual Taxpayer Identification Number, or ITIN tax number and have any other questions, please feel free to contact us at 888-509-3616. If you have any suggestions please share those with us as well. Freedomtax ITIN Number has a professional team of IRS Certifying Acceptance Agents, and tax accounting professionals with more than 16 years of experience, helping immigrants with their ITIN application. Freedomtax can also help immigrant entrepreneurs incorporate a business in the USA. Freedomtax ITIN Tax Number Online services provides Quality, Professional Service with a Family Feel.


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