Numbers are frequently used to identify a variety of things. When you buy a new computer, one of the things you record is the serial number. That number is unique, identifying your specific computer. The same is true for taxes—every business needs a tax identification number, and every individual person in America needs a tax identification number.
There are two kinds of individual tax identification numbers. Both numbers have the same format: 000-00-0000.The first type of individual tax number is the Social Security Number. These are available to all United States citizens, permanent resident aliens and temporary residents authorized to work through a work permit. The second type of individual tax number is the ITIN number. The term “ITIN” stands for Individual Tax Identification Number. Any person who needs a tax identification number but is not eligible to obtain a Social Security Number can apply for an ITIN. An ITIN is easy to identify, as it always begins with the number “9.” An ITIN does not qualify a person to legally work in the United States, nor does it provide eligibility or access to Social Security benefits. ITIN’s are issued by the Internal Revenue Service. The following people should utilize an ITIN number:
The ITIN program has not been around for very long. The program began around 1996. It was set up so individuals without Social Security Numbers could file taxes and abide by U.S. tax laws. Remember—obtaining an ITIN number does not grant you the right to work and receive income in the United States, and it has nothing to do with Social Security, or the right to receive Social Security benefits.
If your U.S. resident status fits one of the above categories, you will need an ITIN in order to file income taxes. Unlike a joint bank account, where two people can share the same account number, each person listed on a tax form must have his/her own ITIN number. If you have any dependents, make sure each of them also has an ITIN. Since they are listed on the tax form, the government needs to ensure that only one taxpayer is claiming that person as a dependent.
There are additional situations in which you may need an ITIN, and they are all tax-related. For example, if you open a business bank account, the bank must have the tax identification number for your business. The bank may also require the ITIN number of any other people connected to the business bank account.
Since I have outlined a few of the ways in which an ITIN number is utilized, it makes sense to discuss the ways in which an ITIN can never be used. Remember that “ITIN” stands for Individual Tax Identification Number. The key here is tax identification. The only manner in which the United States government is allowed to utilize an ITIN number is for tax purposes. It is not to be used by other United States agencies, such as the Immigration and Naturalization Service. The U.S. government and the IRS just want to be certain that anyone who earns money abides by the same set of rules in regard to income taxes.
If you do have an ITIN, be very careful and make sure you file your annual income taxes. Your ITIN will expire if it is not used on a federal income tax form for five (5) consecutive years.
There was a brief period of time, from 2012 to 2014, when ITIN numbers with 5-year expiration dates were issued. Check your paperwork to ensure you were not issued one of the ITIN numbers that is only valid for five years. The IRS revised this rule, however, and it now states the ITIN will only expire if you do not file taxes for five years in a row.
Do you need help getting your ITIN? Although you can obtain an ITIN Number online via the IRS website, it is a confusing form to fill out, and you may wind up needing assistance anyway. A number of our clients have used Seaford Management LLC to obtain their ITIN and rave about their friendly service. Seaford Management LLC is a Certifying Acceptance Agent with the IRS, and they can file your application to obtain an ITIN number. If you have any questions about your ITIN, or would like to get an ITIN, you can email Seaford Management LLC or call them at (302) 990-9003. They offer services in both English and Spanish.