Apply for ITIN- Why and How?
ITIN is a nine-digit account number that stands for Individual Taxpayer Identification Number. It is used by anyone who does not fulfill the requirements to have a Social Security Number and who receives taxable money, such as stipends, scholarships, etc. Issued by the Internal Revenue Service (IRS), ITIN is allotted regardless of the immigration status. Thus, both residents and foreigners who have a tax obligation to file returns can apply for ITIN. In this post, we will discuss the process of ITIN application along with the many benefits of doing so.
Why is it Important to Apply For ITIN Number?
An ITIN enables even undocumented immigrants with no SSN to file tax returns and comply with state and federal tax laws. Also, undocumented individuals can establish a sole proprietorship firm to earn income in the US and obtain a business license.
Without a Social Security Number in place, it may get difficult for your business to acquire loans. However, an ITIN makes the process of securing loans easier.
Now let us look at some benefits of obtaining an individual tax id number.
You can pay taxes
An ITIN is vital if you have to file tax returns. Without this number, you cannot declare taxes and thus, violate the state and federal laws.
You can open a bank account
Although this does not apply to all US states, an ITIN can help in the opening of an account at several banks. This is an important step to starting your sole proprietorship firm.
You can build a credit history
When you apply for ITIN, you can also secure loans and credit cards. With this, you can build a credit history that will benefit you in the future.
You can apply for ITIN to get a business loan
Some lenders allow you to have a business loan only with an ITIN. This loan will help you grow and establish a thriving business.
How to Apply for ITIN?
Fill out the W-7 form
To apply for ITIN, you must have at least one of the following documents:
- Identity proof card
- Driver’s license from your country of origin or the US
- Birth certificate for children below 18 years
- ID card of a US state
- Foreign military card
Next, you need to fill out the Form W-7. You can find this form on the IRS official page. It is available in both English and Spanish versions.
Include your tax return to apply for ITIN
As discussed above, you need an ITIN to declare your taxes in the US. But fortunately, you can process both at the same time. After you have completed Form W-7, you can attach your tax return along with the application.
However, if you do not need to file any returns, you can simply send the Form W-7 together with the essential documents to apply for ITIN.
Check your identity
For an ITIN application, it is important to verify your identity. This is because there is always a risk that some people may provide false data. So, you need to include original certificates and documents that prove your identity as a foreigner.
Submit the application to apply for ITIN
Once done, you can send your application through mail or hand it in person. Your application, which includes W-7, tax return, and proof of identity, must be sent to the following address:
Internal Revenue Service
Austin Service Center
Post Box 149342
Austin, TX 78714-9342
Alternatively, if you wish to hand over the documents in person, you can visit the Taxpayer Assistance Center (TAC). Here, you will get back all your original documents immediately. However, you need to schedule an appointment at your local TAC before visiting to apply for ITIN.
Wait for the ITIN to arrive
It takes about 6 to 8 weeks to process the application, provided all documents are complete and in order. If it takes any longer than that, you can contact the IRS toll-free number, 1-800-829-1040, to inquire about the status of your ITIN.
The individual tax id number is an important document, especially for those who wish to establish a sole proprietorship in the US. It must be noted that the IRS deactivates the ITIN if not used on a federal income tax return for any year during 5 consecutive years.