For both foreigners and residents of the United States who don’t have a Social Security Number, the ITIN is key when it comes to accessing loans and submitting taxes in a simple manner.
What exactly is an ITIN? ITIN stands for “Individual Taxpayer Identification Number”: it’s a tax identification number generally used by foreigners who do not meet the requirements to have a social security number.
Basically, an ITIN is a nine-digits account number (same as a social security number) that you must request only through the IRS. The ITIN is issued regardless of immigration status since both residents and foreigners have the tax obligation to file returns and tax payments.
Why is it so important to have an ITIN number? Because it allows undocumented immigrants with no social security number to file their tax returns to comply with federal and state tax laws. Most importantly, it allows undocumented immigrants to create a business entity to earn income in the U.S. and receive business licenses.
Also, if you don’t have a social security number but you have an ITIN, you can apply for a business loan with Camino Financial.
In this post, we’ll explain how to process your ITIN step by step and the benefits of doing so.
How to submit your ITIN in 5 steps
Step 1: Fill out Form W-7
Before filling out your ITIN application you must have at least one of the following documents: identification card, driver’s license from the US or your country of origin, passport, an official birth certificate for children under 18, ID Card of a US state, visa, American or foreign military card.
To apply for your ITIN, you must fill out form W-7 (“Application for IRS Individual Taxpayer Identification Number”) that you can download here or on the IRS page. You have available both the English and Spanish (Form W-7SP) versions.
Basically, this form is the first step to request an individual taxpayer identification number. However, you must also use it to renew your ITIN if it has expired or is about to expire.
You must complete all the information requested by the form and, if this is the first time you are requesting the ITIN, you must accompany this document with others who may specify the form, depending on your case.
Step 2: Include your tax return
To be able to declare your taxes in the US, you need an ITIN. Luckily, you can process both at the same time. When you are ready to file your tax return, first complete Form W-7 as we have indicated above. Then attach your tax return with your ITIN application.
If you qualify for one of the exceptions and do not need to file a tax return, send only Form W-7 along with the required documents to prove that you meet the requirements of that exception.
Step 3: Check your identity
To complete your ITIN application you need to verify your identity. To do this, include original documents or certificates that prove your identity as a foreigner, such as those mentioned in step 1.
Checking the identity is essential for the IRS because there’s always the risk that some people provide false data to obtain the ITIN.
Step 4: Submit your application
You can send your ITIN application by regular mail or you can hand it in person.
Since your tax return is only an attachment to your ITIN application, you should NOT send these two documents to the address indicated on Forms 1040, 1040A or 1040EZ. Instead, you must send your tax return, your Form W-7 and your proof of identity to this address:
Internal Revenue Service
Austin Service Center
P.O. Box 149342
Austin, TX 78714-9342
If you want to hand your documents in person you can go to any of the Taxpayer Assistance Centers (TAC). There, you also have the possibility to verify the original documents and the certified copies.
In the TAC the documents will be returned to you immediately. Keep in mind that the service provided in these centers is by appointment: you can program it by calling your local TAC.
Step 5: Wait for the ITIN to arrive
One of the most frequent questions is “how long does ITIN take to arrive?” If all the documentation is in order and complete, the time is six weeks. In case it takes longer you can call the IRS toll free at 1-800-829-1040 to ask about the status of your application.
Does Your ITIN expire?
The IRS policy states that Individual Taxpayer Identification Numbers will expire if not used on a federal income tax return for any year during a period of five consecutive years. In other words, the IRS will not deactivate your ITIN if it has been used on at least one tax return in the past five years, and it will remain in effect as long as you continue using it to file U.S. tax returns. This policy applies to any ITIN, regardless of when it was issued, and its purpose is to ensure that anyone who legitimately uses an ITIN for tax purposes can continue to do so.
If your ITIN has been deactivated and you need to file a tax return, you can easily reapply using Form W-7 and following the same process that we explained above. Have in mind that attached to the form, you will have to submit again all the required documents.
Benefits of having an ITIN
You can pay taxes
Having an ITIN number is a necessary tool if you have to file tax returns.
Without this number, you don’t meet the requirements to file a tax return. This can have serious legal implications: therefore, if you want to declare taxes and you don’t have a social security number or an ITIN, you must get the second as soon as possible.
You can open a bank account
Although this does not apply to all US states, an ITIN number can facilitate the opening of an account at several banks.
This way you will have the option to enjoy the advantages of an account, such as saving and starting a business.
You can build a credit history
By having an ITIN number you can apply for loans and credit cards. With this, you can establish a credit history that will benefit you in the future.
With your ITIN you can also apply for a mortgage loan and ultimately comply with some of the laws of the United States.
You can apply for a business loan with Camino Financial
Finally, don’t forget that with your ITIN you can apply for a business loan from Camino Financial even if you don’t have a Social Security Number to start or boost your business in the United States. Have in mind that most lenders will require a Social Security Number when you apply for a business loan. But we are different from the rest!
If you already have your ITIN, don’t wait any longer to grow your business. Simply fill out this application to know instantly if you qualify for one of our business loans.