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Life Abroad

Things to keep in mind when you are filing US taxes with ITIN

Rupali Amin
Rupali Amin

Blog Summary

  • What is an ITIN?
  • Do I need an ITIN?
  • Why should I get an ITIN?
  • How do I apply for an ITIN?
  • How do I file taxes with an ITIN?

Most taxpayers in the US know they have to file tax returns. But do they know how the IRS tracks who has filed and who hasn’t? If you said “by Social Security Number,” you’d be right. But what if a taxpayer doesn't have or cannot obtain a Social Security Number? Can they still be part of a U.S. tax filing? The answer is yes - in some instances. So do you need an ITIN? Let’s begin with what an ITIN is.

What is an ITIN (Individual Taxpayer Identification Number)?

When dealing with the Internal Revenue Service (IRS), it is important to have the proper identification. The IRS issues Individual Taxpayer Identification Numbers (ITINs) for individuals who are required to have a US taxpayer identification number but who do not have and are not eligible to obtain a Social Security number (SSN) from the Social Security Administration.

Do I need an ITIN?

You need an ITIN if you don’t have a Social Security Number, aren’t eligible to obtain one, and are required to furnish a federal tax identification number or file a federal tax return. It could be mostly because you fall in either of these buckets:

  • Nonresident alien who is required to file a US tax return
  • US resident alien who is (based on days present in the United States) filing a US tax return
  • Dependent or spouse of a US citizen/resident alien (one note: non-resident alien spouses who make this election are not required to report his or her individual non-US financial accounts on an FBAR, but if the US spouse meets the filing threshold, then foreign assets of the non-resident spouse must be included to joint form 8938)
  • Dependent or spouse of a nonresident alien visa holder
  • Nonresident alien claiming a tax treaty benefit; and/or
  • Nonresident alien student, professor or researcher filing a US tax return or claiming an exception

Now that you know whether or not you fall under the “obtain ITIN” bucket or not, let’s help you figure out where you can get an ITIN from.

Why should I get an ITIN?

Some of the benefits of getting an ITIN include:

  1. Filing taxes
    Filing taxes can serve as proof of “good moral character” in immigration cases, assuming you wind up not cheating the government out of a bunch of money.
  2. Opening a bank account
    An ITIN can be used as a substitute for an SSN to open a personal checking account with Zolve. A bank account is a safe place to store your money and allows you to establish a financial history.
  3. Building a solid credit history
    Most cards require you to have an SSN while applying. However, Zolve helps you secure a card even with an ITIN.
  4. Claiming tax credits
    When you file your federal tax return with an ITIN, you also stand to receive the tax credits you are eligible for.
  5. Qualifying and purchasing insurance
    Some insurance providers grant your policies with an ITIN in case of absence of SSN.
  6. Acts as identification proof
    An ITIN also acts as proof of identity with certain state governments in the US. In some cases, the ITIN also helps you apply for a Driving License and other important documents.

How do I apply for an ITIN?

There are 2 simple ways to get yourself an ITIN.

In order to obtain an ITIN while overseas, you can either file Form W-7 (together with the required supporting documentation that proves your identity) with your US tax return and send it to the IRS ITIN Operations Center. Note that it’s important that the documentation filed with Form W-7 must be original or certified.

Alternatively you can work with a Certifying Acceptance Agent (CAA), who will review your documentation and return it to you before submitting your completed Form W-7 to the ITIN Operations Center. By using a Certifying Acceptance Agent (CAA), you can save time and energy. The CAA issues a “Certificate of Accuracy” (COA) certificate to the IRS instead of an original passport or a certified copy of the passport.

It takes 4-6 weeks to receive your ITIN. The important thing to note here is that the ITIN is free! If a tax preparer assists you in filling out the form, they may charge a fee. You can seek assistance with the form from your local IRS office for no cost.

How do I file taxes with an ITIN?

Well, it’s quite straightforward, but do remember this step when you are filing for your federal taxes.

  • To file a tax return when you hold an ITIN, you must enter your ITIN in the space for the SSN on the tax form, complete the rest of the return, and submit the tax return (along with any additional forms) to the IRS just like you would with an SSN.

The tax forms that you will use to file taxes depends on whether you are a green card holder or you are in the United States on a temporary visa.

  • Green card holders use Form 1040 (officially called the “U.S. Individual Income Tax Return”), the same form that U.S. citizens use.
  • People on temporary visas file their tax return using Form 1040-NR (officially called the “U.S. Nonresident Alien Income Tax Return”).

Whether you have an ITIN or SSN, filing taxes becomes paramount when you’re in America. Apart from this, with an ITIN you can also apply for the Zolve Azpire Card that lets you build a solid credit score with your own money - without worrying about debts or missed payments! And the best part? You simply have to swipe your card on everyday purchases. That’s right! Apply today: https://zolve.cc/itin