What is an ITIN number? Sounds very basic… and it is! Yet, there are a few things to point out.
The ITIN surged when the IRS realized how many individuals physically present in the US earned income but couldn’t report their taxes.
They strived to become good members of society.
But without an SSN, it seemed impossible.
So the IRS thought something like this…
“You know what? “We must give them a chance to report that income.
Eventually, they may apply for citizenship, a green card, or simply support our economy. We must let that happen.”
So they invented the ITIN number.
Start your ITIN application here: ITIN.com
ITIN Number Uses
The ITIN number, of course, helps to file tax returns and pay taxes.
People who were earning certain types of income like..
- Rental income
- Gambling income
will use their ITIN to report that income to the IRS.
If you’re a non-US citizen, depending on what country you’re from, you may be subject to a withholding on that income.
Get an ITIN to claim that money.
Having an ITIN might help you reduce the withholding rate… or eliminate it altogether.
Other ITIN Number Uses
You may also use the ITIN for other outstanding purposes. For example, to…
- Be a partner of a US Business, such as an LLC or Corporation.
- Open a personal bank account. And if you were able to open one already, to protect it from the bank freezing or canceling your account.
- Pay business taxes as an LLC (which go together with the personal tax return.)
- Report income earned from a US business bank account earning interest.
- Report that you’re on a type of scholarship, fellowship, or grant, or part of the Student Exchange Visitor Program.
- Buy or sell US-based properties.
- Report a mortgage’s interest.
- Claim withheld income.
- Apply for credit cards.
- Buy or rent apartments and cars.
- Apply for unemployment.
As you see, there are many different uses for the ITIN.
Difference Between ITIN and EIN
Keep in mind that eople mix up an ITIN with an EIN.
Here’s the key difference.
The EIN is the tax ID number for a business entity, whether you’re a sole proprietor, or an LLC, or a corporation, or nonprofit.
Each business entity has its own tax ID, called an EIN (Employer Identification Number).
That’s different from an ITIN application, where the ITIN is an individual tax identification,
And lastly, a person can’t have multiple ITINs or an ITIN and an SSN simultaneously.
What to Do Next?
If you have any more questions or comments, go ahead and post them below.
If you’re interested in signing up for our professional ITIN service, go ahead and click the link below to get started with the application.