Benefits of an ITIN?
Individual Taxpayer Identification Numbers were created for foreign investors and visitors who owe taxes but are not eligible for a Social Security number. However, recently a large number of undocumented aliens have obtained ITINs, which enable them to legally file taxes in the United States, even if they lack the appropriate immigration status.
The Individual Taxpayer Identification Number (ITIN) is a tax number issued by the IRS (Internal Revenue Service) and it is not related to the USCIS or the Social Security Administration. The ITIN is only issued for tax purposes. An Individual Taxpayer Identification Number (ITIN) does not provide the right to work or live in the United States.
ITIN Allows a nonresident alien spouse to file a joint return with a U.S. resident. (usually very advantageous)It also Allows dependents living in the United States, Canada or Mexico to be claimed on the U.S. tax return. (must meet all the other dependency tests as well) Applying for an ITIN requires filling out form W-7 (or W-7SP, the Spanish version) and submitting it along with a recent photo and several other documents, including a tax return, and mailing them (they cannot be e-filed) to Internal Revenue Service, ITIN Operations, PO Box 149342, Austin TX,78714-9342.The process and instructions pertaining to required documents are quite complex and also require you to send your original passport or two other valid unexpired documents that verify your identity and support your claim of foreign status. There are 13 acceptable documents, but due to the length of the process you can expect to not have them in your possession for up to 60 days.Under the recent legislation, the entire process has been simplified if you use a Certifying Acceptance Agent (CAA). There are many advantages to using a CAA including advice and assistance in completing form W-7. A CAA can review and validate your documents and submit a certificate in lieu of your actual documents having to be mailed in and you being without them for several months.Other advantages of using CAAs are that they can prepare the tax return and the W-7 and submit them to the IRS for you. The CAA answers all IRS questions during the processing of the application and assures that the most current forms are being used. O & G Tax and Accounting Services has a resident CAA serving clients across the US and many foreign clients and charges a fee for the ITIN Form W-7 application process (tax preparation fees may be applicable).
Frequently asked questions
QUESTION: When I came to this country, the factory owner gave me a “number” to use. Isn’t that my tax ID number?
ANSWER: No, only the IRS or the Social Security Administration can issue a valid tax ID number (ITIN or SSN).
QUESTION: I have a B-1 visa and have been working in the United States for a few years. My two children live in Kazakhstan (they are not U.S. citizens or residents) and I provide all of their support. If I get ITINs for them, can I claim them as dependents?
ANSWER: No, to claim a dependent exemption, the child or other dependent must be citizens or residents of the United States, or residents of Canada or Mexico.
QUESTION: My mother lives in Mexico, but she does not work and I pay all of her support. Can I claim her as a dependent on my tax return?
ANSWER: Yes, assuming you apply for and receive an ITIN for her and she meets the other requirements for dependency.
***Disclaimer: This communication is not intended as tax advice, and no tax accountant -client relationship results**