If you are a non-resident alien in the US, for example a student, professor, or researcher, who needs to file a US tax return but is not eligible to obtain a Social Security Number (SSN), you need to apply for an individual taxpayer identification number.
Internal Revenue Service (IRS) issues this number regardless of immigration status, because even US resident aliens who aren’t eligible for an SSN need an individual taxpayer identification number to file federal tax returns. When the IRS gives you a taxpayer identification number, you are able to use it for federal tax purposes.
While applying, you need to fill and submit a form named “W-7 form” issued by the IRS, but very carefully, as the government may reject your individual taxpayer identification number application in case of any error. Have a look at a few important things, which you should know and consider, while submitting your individual taxpayer identification number application.
Submit original documents
When you apply for your individual taxpayer identification number, do remember that you need to submit original documents like, passport and birth certificate, or certified copies of these documents by the issuing agency. This is because the Internal Revenue Service (IRS) does not accept any copy of documents attested by a notary.
Fill the W-7 Form Completely
When you fill in the W-7 form, it is important to fill it completely. It means that all the lines given on the form must be completed. If you don’t have any information to give or anything to write on a line, mark it with “N/A” instead of making a mistake, that is, to leave it blank.
Write the Date Correctly
There are different formats of writing the dates of our birth. We often write them in a Date/Month/Year format; but what you need to do is, write it in Month/Year/Date style. This is a common mistake people make while applying for a individual taxpayer identification number. Keeping this point in mind; your application might be rejected if you fail to comply.
Do mention Your Relationship
If you need to fill a form for an individual taxpayer identification number applicant who is under 14, the parent or guardian would have to sign the form on his/her behalf. You have to mention the name of parent or guardian in the section of form that asks for the name of delegate. You should also remember to mark the relationship of the individual taxpayer identification number applicant in the same column. Those applicants, who are above 14 years, need to sign their forms themselves.
Give Proof of Identity
Before issuing you an individual taxpayer identification number, the IRS asks for a proof of your “Foreign Status” or “Identity”. When you submit your original passport (or a certified copy of it), there remains usually no need of proving your current status further. But in case your passport has expired or you can not submit it to them, you must submit at least two documents mentioned in the requirement list and at least one of them must have your photograph.
You should submit your individual taxpayer identification number application with due diligence to minimize the risk of application being rejected. Taking help of agents or tax experts can also save you from trouble.
Why do You Need an Individual Taxpayer Identification Number?
If you are living in USA and earning a taxable income; then it is obligatory for you to file your taxes. According to the law, non-resident taxpayers need an individual taxpayer identification number (ITIN) for federal income tax returns. So, for compliance with US tax laws, you need to get an ITIN which is a 9 digit number starting from the digit 9, having a format 9xx-xx-xxxx.
Internal Revenue Service assigns this individual taxpayer identification number to those who are not eligible to get a Social Security Number (SSN) in the US, and strictly limits the use of this number for income tax returns only. Likewise, ITIN holders are not able to enjoy all the tax benefits that the US government offers to its own citizens.
Despite the fact that an individual taxpayer identification number does not verifies your legal status in the US and is only useful for paying taxes, you do get a few added benefits from this number.
Helps establish a good character
Firstly, as this individual taxpayer identification number is issued to all US non-resident aliens who are required to file a US tax return; a large number of individuals who are studying, working or establishing their businesses in the country take advantage of this system to account for their incomes. In addition, it provides them with an opportunity to apply for US nationality, because if you want your citizenship application to be accepted, you must show a good moral character. Having an ITIN ensures that you observe the US tax laws and it could prove to be a positive step towards showing your morality to the country.
Helps Reduce Your Burden
If your dependents live in other places, like in Canada, and you need to send them money to support their living; then you can also apply for an individual taxpayer identification number (ITIN) and put your family on your tax returns. This may help you decrease the money you are obliged to pay in taxes
Helps Seek Financial Aid
Aside from allowing you to fill up a US tax return properly, your individual taxpayer identification number can also assist you in attaining financial aid when needed. Although there are limitations on the use of this number for identification purposes, some banks do accept it as a means to verify your identity while applying for loans or credit card facilities. Using your ITIN for loans or credit card purposes, however, builds your credit history in the US.
Helps secure a driver’s license
Another purpose that the individual taxpayer identification number may serve is; to help you secure your driving license. The use of the ITIN however, for getting a driver’s license is only allowed by a few states within the country.
Helps in IRS Processing
IRS (Internal Revenue Service) processes and tracks tax returns efficiently, with the help of the ITIN issued to foreigners. Again, a number of people using this system help ensure an effective filing method. This individual taxpayer identification number serves as a dummy, when valid W-2s need a number to configure a SSN.
With all the purposes that your individual taxpayer identification number serves, one should not forget the limitations to its use. Do remember that this number does not authorize you to work in the US, nor does it make you eligible for Social Security Benefits.
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.