Learning Center, Tax

How and When Should I apply for ITIN? (Updated) 📄

If you own a U.S based business, have U.S. source income, or have a rental income, you might need to get ITIN to make tax filing, get your refund, and open a U.S. bank account. 

As for the identification of persons, there are two different sets of identification numbers in the U.S. The first one is the Social Security Number which can be obtained only if the person is a U.S citizen or a Green Card holder or holder of a visa that provides the person with a temporary residency in the U.S.

The other number is the Individual Tax Identification Number, which is abbreviated as ITIN. Instead of explaining who can obtain an ITIN, it is easier to define who cannot. Anyone who cannot get a Social Security number (SSN) must obtain an ITIN for tax purposes. Yet still, we would like to present who can indeed obtain ITIN:

  • Foreign individuals who are not eligible for a Social Security Number but have a tax liability in the U.S.
  • Individuals who do not live in the US are not likely to obtain SSN but need a tax ID number for tax returns.
  • Individuals who came to the US for residency purposes need to have a tax ID number for tax returns.
  • Spouses and dependents of US citizens and foreign individuals who went to the US for residency are not eligible to obtain an SSN and must pay taxes.
  • Spouses and dependents of individuals who are not residents of the US but need to file taxes

As for the “right time to apply” for ITIN, it is essential to know why it is so important. ITIN is a TAX IDENTIFICATION number issued by the IRS. It is crucial for filing tax returns. Therefore it is essential to apply for it as soon as possible, especially if you have tax filing obligations. Failing to comply with tax filings would result in severe penalties.

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