By Tom Ramsey
The ITIN (Individual Tax Identification Number) is issued by the IRS (Internal Revenue Service) and given to people who are not eligible to obtain a Social Security number (SSN). In many cases people get false SSN in order to work, because they cannot get a real one for different reasons, the most common of which being an undocumented immigrant. For this reason, the IRS issued the ITIN so that people could pay their taxes legally.
Is it safe to get an ITIN?
While many people may feel nervous about the ITIN, it is proven to be very safe. More than five million people have obtained an ITIN for over 15 years and there has never been a case in which the IRS has provided information to immigration or any police department, and are prohibited by law to disclose that information. The ITIN is intended to enable people to pay their federal and state taxes and, in particular, in order to receive refunds of money withheld or even to qualify for additional financing, as some federal programs, such as the Child Tax Credit.
Who can get an ITIN?
There are no limits to whom can obtain an ITIN. Very often entire families applying for ITIN all at once when they have to pay taxes. The only way to get a new ITIN is to pay a federal tax. This payment may be for prior years or the current year.
Why you must get an ITIN?
The most important reason is to allow the payment of federal and state taxes, or better yet, be entitled to a tax refund! Everybody who works in the United States has to pay taxes. While the U.S. government is still working to develop a Comprehensive Immigration Reform, in recent years it has proposed laws that have not been approved, but can contribute to understanding what might contain the Reform. In all cases, these proposed laws require three to five years of tax payments to start the immigration process. Someone who wants to become a U.S. citizen needs to prove first that has been ‘acting’ as a responsible citizen to pay taxes.
Often people have the right to collect a tax return if their money is withheld from their payments during the working year. The only way to collect these returns is by being taxed through the ITIN, especially with respect to federal and state taxes. Almost 75% of all taxpayers are creditors to any returns, so it is important to receive that money if you are entitled to it.
In addition, a parent who has children under 19 years are likely to qualify for the Child Tax Credit (CTC), which gives $ 1,000 tax credit for each child. If a worker earns more than $ 8,000, then the family may qualify for the Additional Tax Credit, the federal government pays every taxpayer, even if you owe taxes. So this is extra money you pay the U.S. to help families in their spending.
ITIN is also used to obtain credit for phone lines, credit cards, bank accounts, cell phones and some car dealerships. Obtaining a company credit increases the likelihood of more credit, if the taxpayer becomes entitled to them.
In some states can get a drivers license or car insurance simply by presenting the ITIN. Some states only support the SSN, but there are others who accept the ITIN.
It contributes if you want to open your own business, by applying for an EIN (Employer Identification Number). With this numbers, in many states, the person can apply for a business license or corporate form LLC, LLP or S, which we talked about in another article.
In summary, there are very good reasons to apply for an ITIN. Recommend people who do not have it to get it for themselves and, if possible, for the whole family.