What can I do with an ITIN number? What is it used for? How do I get one?
Obtaining an ITIN number is simple and easy; you can use it for various purposes. With one, you can open a bank account, obtain a credit card, file taxes, and much more.
So if you're wondering what an ITIN number is and what it can do for you, we’ll cover all the bases, so you’ll learn everything you need to know about it.
What Is An ITIN Number?
An ITIN is an individual taxpayer identification number. It's a nine-digit tax processing number issued by the IRS to individuals
who are required to have a U.S. taxpayer identification number but do not have and are not eligible to obtain a Social Security number (SSN).
Also, you can use an ITIN to comply with U.S. tax laws and maybe apply several benefits of doing that.
Apply For A Business Loan With An ITIN Today!
Why do you need an ITIN number?
You need an ITIN to file taxes if you are a nonresident of the United States and do not have a Social Security Number. The IRS will issue you an ITIN
if you meet specific requirements, such as being a foreign national and having income subject to U.S. tax.
Another purpose of the ITIN number is to claim a tax treaty benefit on your U.S. tax return if you are a foreign country resident and have income exempt from U.S. tax under the provisions of a tax treaty between the United States and your country of residence.
What Can an ITIN Number Be Used For?
Most people think your ITIN is only for tax purposes, but that's not true. The nine-digit number has different uses.
Establish Proof Of Residency
There could come a time when you must 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 comes in. As you already know, this nine-digit number allows you to file your taxes. And a tax return is quick and easy proof of how long you've lived here.
Get A Business Loan
Part of living the American dream is starting your own business. There's just one problem, though. Businesses need financing to grow and thrive. In other words, you need the money to start your business.
Here's the thing, most lenders require that you have a social security number to obtain a business ITIN loan
. If you're an undocumented immigrant, that leaves you out.
Or does it?
Several countries' lenders 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.
Get A Driver's License
A driver's license means freedom in the United States; it’s a much-needed I.D. and can allow you to go anywhere (at least by car). You want to get a license to 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 accept ITINs for people who want driver's licenses. If you're going to get a driver's license, see if your state is one of the many granting licenses for immigrants with ITINs.
Then, you can hit the open road legally.
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. But, like other forms of income, you have to pay taxes on it.
And if you don't have the correct tax identification number, you cannot open an interest-bearing bank account.
While some think you must 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.
This is a must if you're running a business in the United States. With an interest-bearing account, you can make your money work for you. Now, that's how you live the American dream.
Obtain A Mortgage
You know that you're really living the American 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 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 in the American dream.
Can I Work With An ITIN Number?
The answer is a bit complex.
To work in the United States, an applicant must have a valid SSN issued by the U.S. government to eligible residents.
Legally, resident and nonresident alien employees cannot be W-2 employees if they don't have a Social Security Number (SSN).
Employers who accept an ITIN in place of an SSN for employment verification face IRS penalties.
However, they can employ a self-employed independent contractor with an ITIN.
This person (the ITIN-holder) receives a 1099 statement at the end of the year rather than a W-2 because they aren't employees and don't have taxes withheld from their paycheck.
Some Other ITIN Benefits
Allows you to claim certain tax credits
If you are a low-income taxpayer, you may be eligible for the Earned Income Tax Credit (EITC). And if you have children, you may be able to claim the Child Tax Credit.
Other tax benefits may be available include the American Opportunity Tax Credit and the Lifetime Learning Credit.
So, if you are not eligible for a Social Security number but need to file a federal tax return, having an ITIN can help you get some much-needed financial assistance.
Comply with the individual shared responsibility provision under the Affordable Care Act
Allows unauthorized immigrants to comply with the individual shared responsibility provision under the Affordable Care Act (ACA).
The ACA's individual mandate requires all individuals to have health insurance or pay a tax penalty.
Because unauthorized immigrants are not eligible for Medicaid and most will not have access to employer-sponsored health insurance, obtaining an ITIN is one way to show they have coverage and avoid the tax penalty.
Help you to start and build credit
You can build credit with an ITIN number, use it to open a bank account to apply for a loan, and establish a credit history in the U.S.
Having a good credit history will make obtaining loans easier and improve your chances of being approved for credit cards and other types of financing.
You can save for your retirement
You can contribute to a retirement savings account.
This can be a huge benefit if you are looking to save for your long-term future.
There are many different types of retirement accounts that you can contribute to with an ITIN number, including traditional IRA accounts, Roth IRA accounts, and 401(k) accounts.
All of these options have different benefits and features, so it is essential to research to find the best account for your individual needs.
Apply For A Business Loan With An ITIN Today!
What Can I Not Do With an ITIN?
While your ITIN number is helpful for several things, it does have some limitations.
- First, it won't change your immigration status. If you are an undocumented immigrant, the classification will still be such, even if you get your ITIN.
- Technically, an ITIN doesn't give you employment eligibility. Of course, a person can work or run a business, but their ITIN is only a tool to pay taxes. It doesn't change their legal status.
- You won’t be eligible for social security benefits when you get an ITIN. You will need a Social Security Number (SSN) to qualify for these benefits.
But it's not all bad. Check out this limitation:
- An ITIN number is not for immigration enforcement. At its core, it helps the government collect taxes. Applying for an ITIN won't hurt you or affect you. It will just help you.
Use these steps to apply for an ITIN:
- Complete a form W-7 (application for IRS Individual Taxpayer Identification Number) and attach it to your completed federal tax return. If you have a filing and reporting requirement, you can file anytime within a calendar year.
- Submit required original I.D. documents to verify your identity and foreign status.
- Mail the form W-7 return, original identity, and foreign status documents to Internal Revenue Service, Austin Service Center, ITIN Operation, P.O. Box 149342, Austin, TX 78714-9372. Note: this is the only time you file a return to this specific address.
- Apply in person using an IRS-authorized certifying acceptance agent to verify your original documents and provide certified copies.
- A third way to apply is to visit an IRS Taxpayer Assistance Center. They will verify your identity and foreign status documents so you can keep your originals for the ITIN process application.
- The IRS, on average, issues a letter within 7 weeks showing the new ITIN.
ITINs expire within 5 years or sooner if the individual has not submitted at least one tax return within that time frame.
You can renew your ITIN
by mail or by visiting a designated IRS Taxpayer Assistance Center (TAC). You must complete and submit Form W-7 and your original documentation or Certified Copies from the issuing agency.
Is an ITIN Number What You Need?
Once you have read the article, we hope you have a clear answer to the question: What can I do with an ITIN number?
An ITIN number is essentially a social security number for non-US citizens. It allows you to work and file taxes in the United States, even if you don't have a green card or visa. If you're a foreign national who wants to work in the US, an ITIN number is essential.
There are many benefits and reasons to having an ITIN number, including the ability to file taxes and claim tax refunds. With an ITIN number, you can also open a bank account and apply for credit cards and loans.
According to this, if you're looking for a loan but don't have a Social Security Number, an ITIN number can be a great option.
You can save yourself time and effort by choosing Camino Financial. We offer ITIN loans
, so you don't have to spend your time searching. Just apply and get the money you need for your business.
Apply For A Business Loan Today!
Can you work in the U.S. with an ITIN number?
Employers cannot legally hire individuals as employees unless they have a valid SSN.
That said, you can work as an independent contractor and perform services because there's no income tax withholding.
Where can I use my ITIN number?
You can use ITIN numbers for various purposes, including tax filings, applying for a credit card, or opening a bank account.
You can't use it to file your taxes directly online, but you can use them to download the necessary forms from the IRS website. You can then mail in your completed paperwork and wait for your refund.
What happens if you use a fake SSN to get a job?
It's illegal to falsify an SSN because it belongs to someone else. Employees' wages and withheld taxes appear on account of the legal holder of the SSN, making them liable for any Federal tax due.
When using another person's SSN, a U.S. citizen faces legal prosecution proceedings; illegal immigrants can face immediate deportation.
How to build credit with an ITIN number?
If you have an ITIN number, you can build credit using a credit card or loan. You can also use a credit-builder loan which commonly helps people with no credit history or poor credit scores build up their credit.
You simply put down a deposit to get a credit-builder loan, and the lender reports your payments to the major credit bureaus. This will help you to improve your credit score over time.
Another option is to use a secured credit card, which requires you to put down a deposit that serves as your line of credit. Making on-time payments with either of these options will slowly but surely help you to improve your credit rating.
Can someone with ITIN number file taxes?
Yes, someone with an ITIN number can file taxes in the United States. To do so, they will need to have filed a federal tax return in the past and have all of the required documentation.
However, it is important to note that anITIN number does not confer lawful status or work authorization in the United States.
Therefore, if someone does not have a valid Social Security Number or another type of work authorization, they will not be able to work in the United States.