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- What is ITIN?
An Individual Taxpayer Identification Number (ITIN) is a unique nine-digit tax processing number issued by the Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but aren’t eligible for an SSN. ITINs were introduced to ensure that individuals, regardless of their immigration status, can comply with U.S. tax laws and fulfill their tax obligations.
- Who need’s ITIN?
- Non-residents:
Individuals who are not US citizen or permanent resident but have US tax obligations. Such as those who are earning income in United States of America. - Dependents:
Non-resident alien dependents may need an ITIN to be claimed on a U.S. tax return.
- Spouses:
Spouses of U.S. citizens or residents may need an ITIN to file a joint tax return or claim certain tax benefits. - Foreign investors:
non-residents who are investors in United States may need ITIN to open their bank accounts, obtain mortgages and to report income from these investments. - Business owners:
Non-resident aliens operating a business in the United States, or owning property here, often need an ITIN for tax purposes.
- Why is ITIN important?
ITIN is important for several reason:
- Tax Compliance:
Those individuals who don’t have SSN can file their tax through their ITIN without an ITIN, they cannot report their income, file tax returns, or meet their tax responsibilities.
- Legal requirements:
if you are earning in USA it’s a legal requirements to have an ITIN to report in IRS for your tax filing if you don’t have ITIN then the individual will face legal consequences. - Access to tax benefits:
ITIN holders may be eligible for certain tax benefits, such as the Child Tax Credit or the American Opportunity Credit, which can help reduce their tax liability. - Financial Transactions:
Some financial institutions and businesses may require ITIN for opening bank accounts, securing loans and conducting other financial transitions.
