America’s tax system at times may prove overwhelmingly technical to the non-resident individuals. Among the important things that a non-resident needs to know is about the Individual Taxpayer Identification Number.
This article will help you walk through how to get an ITIN, why it’s important, and how to obtain it for free.
Whether you are a student, a foreign investor, or a businessperson dealing with the U.S., knowing how to get an ITIN number is essentially taking care of observing the U.S. tax laws.
What is ITIN Number?
An Individual Taxpayer Identification Number is just an IRS-issued tax processing number. The ITIN is a nine-digit number, formatted just like a Social Security Number with XXX-XX-XXXX format and is used to facilitate tax reporting for an individual who is not eligible for an SSN.
ITINs are paramount in making sure non-residents, as well as all those without an SSN, get to fulfill their obligation with regard to taxes in the U.S.
What is the ITIN Number Used for in the USA?
The number is mainly required for federal tax reporting purposes and is quite essential for a number of tax purposes. Most importantly, the uses are as follows:
- Filing Tax Returns: An ITIN must be utilized by non-residents while filing their U.S tax returns.
- Opening a Bank Account: It may be required by some other financial institutions to open an account.
- Claiming Tax Treaty Benefits: The ITIN is applied for employing tax treaty benefits by nonresidents.
- Get Tax Refunds: ITIN holders are permitted to obtain tax refunds from the IRS.
- S. Tax Law Compliance: It enables the persons without an SSN to comply with the U.S. tax laws.
Required Documents
Many documents are required to be presented while applying for an ITIN to show proof of identity and foreign status. The most basic form that is needed to be attached for this purpose is the IRS Form W-7, Application for IRS Individual Taxpayer Identification Number.
Along with the Form W-7 following documents are required :
Passport (SELF-CONTAINED DOCUMENT FOR BOTH IDENTITY AND FOREIGN STATUS)
If a foreign passport is unavailable, two of the following documents containing at least one with a recent photograph:
- National identification card Must contain photo, name, current address, date of birth, and expiration date
- S. driver’s license
- Civil birth certificate
- Foreign driver’s license
- S. state identification card
- Foreign voter’s registration card
- S. military identification card
- Foreign military identification card
- Visa issued by the U.S. Department of State
- S. Citizenship and Immigration Services, USCIS photo identification
- Medical records of dependents below the age of 6 years
- School records of dependents below the age of 18 years in case of a student
Need of ITIN Application
The application of ITIN is of much importance for those non-resident aliens who have to deal with the taxation system of the U.S. The reasons impressing the importance of ITIN application are:
- Legal Compliance: Non-residents must comply with the U.S. income tax laws; IRN is necessary to pay associated taxes for the income earned.
- Penalties Avoidance: Applying for ITIN avoids penalties for failure to file returns and failure to pay taxes.
- Access to Financial Services: Many financial services require or need one to have an ITIN, like opening a bank account or financing a loan.
- Claiming Tax Benefits: These may include tax treaty benefits as well as tax credits which are retrievable only through an ITIN.
- Tax Refunds: Without an ITIN, it is not possible for such an individual to receive any refund from the Internal Revenue Service.
How Can Non-Citizens Get an ITIN Number?
Being a non-citizen, the following steps have to be followed by that individual in order to obtain an ITIN:
- Application Form W-7: This begins with the completion of the appropriate IRS Form W-7. The form needs to be correctly filled out with all fields filled.
- Gather Required Documents: You’ll need documentation that supports your identity and your foreign status. The most painless route is a passport. If that is not available, you will need two other forms of identification.
- Submit the Application: There are three ways to apply. You can mail the completed Form W-7 along with the required supporting documents to the IRS address listed in the instructions for Form W-7.
- In-Person: You can apply in person at any IRS Taxpayer Assistance Center or through an IRS-authorized Certifying Acceptance Agent.
- Through a Financial Institution: Lessoften than not, some financial institutions are accepted to help in applying for the ITIN
- Wait for Processing: Once your application is forwarded to them and reviewed, if your application is fine, the IRS mails you an ITIN. It averages seven weeks, but it may be longer for peak times.
How to Get ITIN Number for Free?
Getting an ITIN is free of cost from the IRS itself. But sometimes third-party services may charge you for helping in the procedure for application. Here are ways to get an ITIN number for free:
- Do It Yourself: Fill out Form W-7 all by yourself. You will need to attach the required documents and follow through with the IRS instructions to avoid any processing fees.
- Visit an IRS TAC: The IRS provides in-person services for free in almost all states in their Taxpayer Assistance Center. There is always an appointment scheduled to seek help with no fees.
- Avail VITA Programs: The Volunteer Income Tax Assistance program may be availed by taxpayers seeking help for free for eligible persons and ITIN applications are also included.
- Avail Help from a CAA: Some Certifying Acceptance Agents are free of cost, especially the not-for-profit ones.
Conclusion
Getting an ITIN number is essential in case of requirements connected with US tax compliance on the part of non-residents.
Advanced screening of the application process, documents required, and the main reasons for obtaining an ITIN will help undergo the process smoothly.
In this article, we shall discuss multiple steps a non-citizen can take toward getting their ITIN efficiently and usually free.
Be it filing of a tax return, claiming tax treaty benefits, or even opening of a bank account, having an ITIN is important for a non-resident seeking to navigate the financial system of the U.S.
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.