Individual Taxpayer Identification Number (ITIN) is issued by the Internal Revenue Service (IRS) to those who have social security number (SSN). Green card holders, U.S. citizens and those holding a student or work visa are eligible for an SSN. If you still don’t have ITIN, here are ways to use your ITIN:
Paying Income Taxes
You will use the ITIN for filing an income tax with the right authority. Everybody who lives and works in the country should pay taxes o the government. Often, you may also use your SSN to make such payments. But, those who are not eligible for SSN can use their ITIN for filing both state and federal taxes.
Getting Credits and Loans
If you wish to get mortgage loans or credit cards from banks, you will need to apply for an ITIN number. ITIN loans can be used for buying homes that can be used for as main residence, an investment property or a second home.
Getting Tax Refunds
Sometimes, the IRS makes mistakes in taxing people. With ITIN, you can get refunds of income that the IRS withholds.
To get a U.S. citizenship, non-resident or undocumented aliens must prove they have been responsible citizens during the past three to five years of their stay in the country. Having ITIN proves that you are paying taxes which means you are acting responsibly while you live in the United States.
Starting a Business
If you have ITIN, you can apply for an employer identification number or EIN to open a business legally in the country. In a lot of states, the number is used for getting business licenses or forming a corporation.
There are other reasons to get ITIN such as for getting insurance, phone lines, driving license and mobile phones. Such things are essential for everyone living in the U.S.
Qualifying for Child Tax Credit (CTC)
The CTC offers a tax credit that amounts to around $1, 000 for every child. Those who earn over $8, 0000 can also qualify for Additional Tax Credit. The government pays this to taxpayers even if they still haven’t paid their taxes.
Once you have your ITIN, make sure you renew it on time. You don’t want to wait until the last minute and learn that the IRS has rejected your tax returns. Because ITIN is a source of identity theft, some of them may now expire if not renewed. Renewing your ITIN involves filling out form W-7 with the required supporting documents.