You’ve immigrated to the United States and started a business. That’s no small feat; it requires courage and drive (you definitely deserve a standing ovation). And you’ve probably heard that you need an ITIN number to pay your taxes.
But what exactly is this number?
Do you really need it?
Is it only for taxes, or does it have other purposes?
We’re going to cover all the bases, so you’ll learn everything you need to know about an ITIN. That includes: what an ITIN is for, five additional uses for an ITIN, and the limitations for this number.
ITIN stands for Individual Taxpayer Identification Number.
Are you ready to learn about ITINs?
What Is an ITIN for?
If you earn money in the United States, you have to pay taxes. That’s an undeniable fact and something everyone needs to do (especially business owners). Like Benjamin Franklin said, “In this world, nothing can be said to be certain, except death and taxes.”
But an SSN is required to file taxes.
What if you don’t have a social security number?
If that’s the case, you can get an Individual Tax Identification Number or ITIN. Once you get the nine-digit number, you can use it to comply with your tax obligations.
But here’s the thing, while taxes were the reason it was created, you can use it for other things. Your ITIN number can do much more than making Uncle Sam happy.
Let’s look at some other things you can do with your ITIN.
What Else Can You Do With an ITIN number?
Most people think that your ITIN is only used for tax purposes, but that’s not even close to the truth. The nine-digit number has five additional uses.
Check them out:
1. Establish Proof of Residency
There could come a time when you need to prove how long you’ve lived in this country. Having electric bills in your name won’t be enough. You need proof that you have lived here and paid taxes.
And that’s where an ITIN can come in. Like you already know, this nine-digit number allows you to file your taxes. And a tax return is a quick and easy proof of how long you’ve lived here.
Don’t confuse proof of residency with a proof of identification. Neither an ITIN nor a tax return are considered proof of identification.
2. Get a Driver’s License
A driver’s license means freedom in the United States, it’s a much-needed ID, and it can allow you to go anywhere (at least by car). You definitely want to get a license so you can legally drive to work, see friends, and so much more.
Many people think you need a social security number to get a license.
Fortunately, some states do accept ITINs for people who want drivers’ licenses. If you want to get a driver’s license, see if your state is one of the many that grant licenses for immigrants with ITINs.
Then, you can hit the open road legally.
3. Get a Business Loan
Part of living the American dream is staring your own business. There’s just one problem, though. Any type of business needs financing to grow and thrive. In other words, you need the money to do it.
Here’s the thing, most lenders require that you have a social security number to obtain a business loan. If you’re an undocumented immigrant, that leaves you out.
Or does it?
Several lenders in the country let you obtain financing even if you only have an ITIN number.
But there’s a catch; if you don’t know of a good lender that accepts ITINs, you could spend days or weeks searching for the right option.
Fortunately, you can save yourself time and effort by choosing Camino Financial. We offer business loans to applicants with ITINs, so you don’t have to spend your time searching. Just apply and get the money you need for your business.
4. Open an Interest-Bearing Bank Account
Here’s something that most people don’t think about. The interest you earn with a bank account is income. Like other forms of income, you have to pay taxes on it. And if you don’t have the proper tax identification number, you cannot open an interest-bearing bank account.
While some people think you have to get a social security number to open an interest-bearing bank account, that isn’t true.
You can open your account with an ITIN number with some banks. Then, you can start earning some interest on what you deposit.
If you’re going to run a business in the United States, this is a must. With an interest-bearing account, you can make your money work for you. Now, that’s how you live the American dream.
5. Obtain a Mortgage
Do you know what else is involved in the American dream?
Buying a house!
You know that you’re really living the dream once you purchase some real estate.
You can make that dream come true when you have an ITIN number. Some lenders will provide you with the loan you need for your mortgage.
And it gets better, while you might think you need to have a massively high credit score to get a mortgage with an ITIN number, that’s not always true. You can get approved with a credit score in the 620 range. Some lenders only require 3 percent down, too.
That’s not bad for putting your stake on the American dream.
While your ITIN number is useful for several things, it does have some limitations.
- First, it won’t change your immigration status. If you are currently an undocumented immigrant, you’ll still be classified as such, even if you get your ITIN.
- Technically, an ITIN doesn’t give you employment eligibility. You can work or run your business, of course, but your ITIN is only a tool to pay taxes, it doesn’t change in your legal status.
- You also won’t be eligible for social security benefits when you get an ITIN. You will need an SSN to qualify for these benefits.
But it’s not all bad. Check out this limitation:
- An ITIN number is not used for immigration enforcement. At its core, it’s used to help the government collect taxes. Applying for an ITIN is not going to hurt you or affect you in any way. It will just help you.
You Definitely Need an ITIN
There are lots of reasons to get an ITIN. Yes, you should get one so you can pay taxes, but that’s not all.
Your ITIN can also help you get a small business loan, establish proof of residency, and so much more.
If this article piqued your interest in getting an ITIN, keep reading: