The individual taxpayer identification number (ITIN) is a tax identification number that individuals who are not eligible to get a social security number can use so they can file their taxes. In order to apply for an ITIN, you must meet the following requirements: You are not eligible to get a Social Security Number (SSN) because you are not a U.S. citizen, an alien who does not reside in the U.S., or an individual who is a resident of another country and will only be in the U.S. for a short period of time. This blog post will explain how to apply for an ITIN, what documents you’ll need, and more!
Who Should Apply for an ITIN?
Anyone who is not eligible to get an SSN and makes money in the U.S. should apply for an ITIN. This includes individuals who are working on a visa, foreign students studying in the U.S., people who are married to U.S. citizens, and more.
The only people who don’t need to apply for an ITIN are nonresident aliens who are filing a U.S. tax return to report income that is effectively connected with a U.S. trade or business.
How to Apply for an ITIN?
The first step to applying for an ITIN is making sure you meet the requirements in the section above. The next step is to gather documents and information that you’ll need when you go to the ITIN application appointment. The following information is based on how the ITIN application process has changed. Please visit the official IRS website for the most up-to-date information and instructions. Here are the documents you’ll need when you go to the ITIN application appointment:
- A valid passport – The passport must be valid and be issued by the U.S. Department of State. The name on the passport must match the name on your application.
- Evidence of Physical Presence – This can be a combination of any of the following: a utility bill, a pay stub that shows the period of employment, a statement of income from your employer, or a housing rental or mortgage payment agreement.
- Evidence of your foreign status – This can be a copy of your visa, a passport, a Permanent Resident Alien card, or an I-94 Travel Record.
- A signed statement – In this statement, you will declare that you are not filing this application for the purpose of obtaining an SSN for a child who does not require an SSN and is not lawfully present in the U.S. or for someone other than yourself. You will also state that you are not residing in the U.S. and were not physically present in the U.S. for more than 10 months during the 12-month period ending on the date you signed the statement.
- Evidence of your Foreign Address – This can be a utility bill, a bank statement, a medical statement, a school transcript, or a rental or mortgage agreement.
- Proof of your Foreign Income – This can be a W-2 form, a 1099 form, an Internal Revenue Service (IRS) form 1042, an IRS form 1099, a letter from your employer, a copy of your income tax return, or a statement of your investment income.
- Payment for the Application Fee – At this time, the application fee is $70. If you are eligible to file a reduced-fee tax return, you might be able to get a refund for the application fee.
- Document Authentication – You should contact the company or organization that issued any foreign document that you attach to your application to find out how to get it authenticated.
- A valid EIN
Tax Consequences of Having an ITIN
The main difference between having an ITIN and SSN is that an ITIN will not grant you credit towards the Earned Income Tax Credit. That being said, having an ITIN can have some other tax implications. If you have an ITIN and you receive a large amount of income that’s taxable, the IRS may audit you. If you have an ITIN and you’re a foreign investor who makes a significant investment in U.S. property, you may be subject to the Investment in American Real Property Tax Act (IARPA). Keep in mind that if you get an ITIN, you won’t be able to apply for an SSN later. You will, however, be able to claim your dependents and file taxes like everyone else.
Final Words: Is It Worth Applying for an ITIN?
Although the requirements to get an ITIN are straightforward, the application procedure can be complicated. If you’re applying for an ITIN for the first time, you may want to consult with a tax specialist just to make sure you have everything you need. Once you have the ITIN, you’ll be able to file taxes just like any other person living in the U.S. You will not be able to get an SSN even if you are approved for an ITIN.
The main benefit of having an ITIN is that you’re able to file taxes like any other person living in the U.S. In addition, if you’re getting a large amount of income that’s taxable, you will probably be audited if you have an SSN but not if you have an ITIN.