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What Is ITIN (Explained: All You Need To Know)

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What Is ITIN

ITIN is short for Individual Taxpayer Identification Number which is a tax-processing number issued and used by the Internal Revenue Service (IRS) in the United States.

The ITIN number is used to ensure that people who do not have a Social Security Number or immigrants to the country can pay their taxes and properly identify themselves with the IRS.

In essence, the ITIN number was created by the IRS to allow foreign nationals and those who are not eligible to get a Social Security Number to comply with the US tax laws.

The ITIN number typically starts with the number “9” and then has a total of nine digits in the following format: 9XX-XX-XXXX.

Ultimately, the ITIN number allows the IRS to identify foreign nationals who are filing their taxes in the United States.

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Who Uses An ITIN Number

The ITIN number is generally issued to individuals who are required to pay taxes in the United States but are not eligible to have an SSN.

Here are those that can potentially obtain an ITIN number:

  • Individuals who do not have lawful status in the United States
  • Individuals who are lawfully in the United States but are not eligible for an SSN

For instance, a foreign national who is legally residing in the United States that is required to file taxes based on the number of days spent in the country will need an ITIN.

Alternatively, foreigners who are in the US to study, teach, or do research may need an ITIN.

Dependents and spouses of a person who is a US citizen or permanent resident may get an ITIN as well as those of foreign nationals on a temporary visa.

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Why Get An ITIN

Getting an Individual Taxpayer Identification Number (ITIN) is important as it allows individuals without a Social Security Number to comply with the US tax laws.

The main reason why the IRS may require you to get an ITIN is to enable you to pay taxes to the US tax authorities if you do not have a Social Security Number or you’re not eligible to get one.

Although the ITIN holders are required to pay taxes in the US, it’s important to keep in mind that they will not benefit from all the tax credits and benefits the IRS offers American citizens or permanent residents.

On the other hand, some ITIN holders may be eligible to receive a Child Tax Credit depending on their situation.

Another important reason why you may need an ITIN number is to allow you to obtain a driver’s license.

A person without an SSN can obtain an ITIN so they can then apply for a driver’s license.

You may also need an ITIN to open an interest-bearing bank account or to show as your proof of residency.

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How To Apply For ITIN

There are different ways you can apply for an ITIN.

One common way to apply for an ITIN is to complete a Form W-7 and submit it with your income tax return to the IRS.

Once your application is approved, the IRS will then send your ITIN number by mail.

Another way you can apply is to go through an Acceptance Agent who is authorized by the IRS to help W-7 applicants.

You can also use a Certifying Acceptance Agent who is authorized by the IRS to authenticate applicant documents.

Finally, you can apply through a Taxpayer Assistance Center helping individuals apply for an ITIN.

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ITIN vs SSN

What is the difference between ITIN and SSN?

An ITIN is an Individual Taxpayer Identification Number which is a number issued by the IRS to foreign nationals such as undocumented aliens and nonresident aliens that conduct business in the United States.

The ITIN is issued to allow foreign nationals without a Social Security Number to file their taxes with the IRS.

On the other hand, SSN stands for Social Security Number which is a tax number issued to US citizens and authorized residents such as F1 visa holders to Green Card holders.

The SSN allows individuals to work in the United States, pay taxes, and get Social Security benefits, pension, and other governmental services.

Every American is issued an SSN.

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Takeaways 

So there you have it folks!

What is an ITIN?

In a nutshell, an ITIN stands for Individual Taxpayer Identification Number which is a number issued by the IRS to non-resident aliens who are not eligible to get a Social Security Number but are required to pay taxes.

For example, those studying in the US, professors, researchers, or other non-resident aliens may need to get an ITIN number.

Foreign nationals may be required to pay taxes in the US to comply with US tax laws and for this reason, it’s important for them to verify if they need to get an ITIN or not.

Now that you know what ITIN is all about and how it works, good luck with your research!

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Author

Editorial Staffhttps://lawyer.zone
Hello Nation! I'm a lawyer and passionate about law. I've practiced law in a boutique law firm, worked in a multi-national organization and as in-house counsel. I've been around the block! On this blog, I provide you with golden nuggets of information about lawyers, attorneys, the law and legal theories. Enjoy!

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