Applying for an Individual Taxpayer Identification Number may be too confusing to do by oneself. If you’re applying for one for tax purposes or just to help out a family member, it is important to get it right when indicating it on the application.
All of us hate delays because of mistakes. This article serves to explain the most common mistakes of an ITIN application and how to avoid them. Let’s start!
What is an ITIN?
First, let’s understand what an ITIN actually is. An ITIN is a tax processing number issued by the Internal Revenue Service (IRS). It helps people who do not qualify for an SSN but still need to file taxes. This number is critical to any person in the United States having income but no SSN.
Why is the Application for an ITIN Important?
Getting the ITIN right is important since it will help you in the following ways:
- File taxes in the right way; filing your taxes wrongly will cost you penalties.
- Claim tax benefits that sometimes require you to have an ITIN before you claim them.
- Establish your financial identity by opening bank accounts and even applying for loans.
With all these examples, we now know how the ITIN is important. However, despite these precautions, some people still commit common mistakes that will delay their applications for the ITINs.
Common Mistakes when Filing an ITIN Application
1. Incorrect Information
The biggest mistake one makes is giving wrong personal information. This includes:
- Name mismatch: Make sure that the name on your application matches the one on your official documents.
- Error in birthday: Ensure that your birth date is accurate.
- Address errors: Verify that the mailing address you put is current and correct.
Tip: When filling out your application, make a cross-reference between your application document and identification documents. A typo can make you very slow!
2. Missing Documents
You are likely to fail because you didn’t attach all the mandatory documents. The IRS requires some documents to identify you and to confirm your foreign status. If you do not attach these, then this is also a sufficient reason for a rejection of your application:
- Passport
- National ID card
- Birth certificate
Tip: Prepare a list of documents you should attach to your form before filing the application. This way, you will not miss something important.
3. Filling the Wrong Form
Many wrong applicants use the wrong form. You should be on Form W-7, which is the one for ITIN application use. Some people may mistakenly pin it alongside other IRS application forms; this automatically eliminates them.
Tip: Cross-check that you are submitting your most updated version of Form W-7. Always refer to the IRS website for the applications.
4. Not Understanding Eligibility Requirements
Before you even start to apply, you first need to find out if you qualify for getting an ITIN. The majority of people don’t know if they need an ITIN because you might become eligible if any of the following applies to you:
- You are not qualified to get an SSN.
- You have a filing requirement.
- You are an applicable dependent or spouse of a U.S. citizen or resident.
Tip: To be sure about your eligibility, check the requirements on the IRS website or consult a tax professional.
5. Missing the Deadline
Sometimes applicants miss tax filing deadlines. This makes things more complicated when applying for an ITIN. So, apply for your ITIN before the tax deadline to avoid unnecessary complications.
Tip: Keep a calendar reminder of both tax deadlines and your application for an ITIN. Being organized always helps you remember the most important dates!
6. Wrong Method of Submission
Some applicants fail to take the right procedure when it comes to submitting the applications. Alternatively, you can post your application or submit it physically at some IRS Taxpayer Assistance Centers.
Tip: If you choose to mail it, ensure to get the proper mailing address. If you also decide to submit it in person, you can locate the IRS Taxpayer Assistance Centers on their website.
Additional Tips for a Seamless ITIN Application Process
- Review Application: Take time to review everything before sending.
- Seek Help If Confused: You may ask a tax professional to guide you if you get confused.
- Keep Copies: Ensure that you keep copies of your application together with the documents you are sending for your records.
- Track Application: The moment you have submitted the application, you can trace it with the IRS.
Applying for an ITIN does not have to be a terror at all. Avoid common mistakes, and you will make the entire process smoother and more efficient. Just remember to double-check your information, include all of the necessary documents, and don’t miss deadlines. Following these tips will have you securely on your way to successfully applying for your ITIN!
So, are you finally ready to file your ITIN application? This guide shall walk you through them in such a way that you won’t fall into the pitfalls. Good luck!
For more detailed information on Individual Taxpayer Identification Numbers (ITINs), including how to apply and legal considerations, visit the IRS official page on ITINs.
For further assistance with ITIN applications, check out our ITIN page.