Are you trying to move to the United States? Maybe, you’ve already moved but you still need to get a few things sorted out before you start to feel settled. One of the most important things you need to remember to do is to get your Taxpayer Identification Number (TIN) or your Individual Taxpayer Identification Number (ITIN).
Sounds like a lot of fun, right? Don’t worry we’ve got you covered. With your TIN you’ll be able to start working, earning and gain access to a number of services.
Below we’ll be highlighting a number of topics to help you understand how to get your Taxpayer Identification Number (TIN), including:
- What is a Taxpayer Identification Number?
- What is an Individual Taxpayer Identification Number?
- How do you get your Taxpayer Identification Number?
- What can you do once you’ve got your Taxpayer Identification Number?
- How do you send money abroad?
What is a Taxpayer Identification Number (TIN)?
As the name suggests, a Taxpayer Identification Number (TIN) is a number used to identify you for tax purposes in the United States. It is a common reporting standard that has been around for many years and helps to ensure that tax processes are accurate and run smoothly.
A TIN will usually be assigned to you by the Social Security Administration or by the Internal Revenue Service (IRS). Most countries will have some sort of tax identification number because it helps to combat tax evasion and helps to maintain a level of financial security and certainty when it comes to tax issues.
What is an Individual Taxpayer Identification Number (ITIN)?
An Individual Taxpayer Identification Number is basically the same as a TIN. The difference is that ITINs are used by individuals who may or may not have the right to work in the US. For example, people on temporary visas and non-residents with US income are eligible for ITINs and should get one as soon as possible.
Like the TIN, the ITIN is a 9-digit number that begins with the number “9” and is formatted like an SSN (NNN-NN-NNNN). If you’re unsure about whether or not you need to get an ITIN, don't worry! You can use the IRS’s Interactive Tax Assistant tool to help you find out whether you need to file an application to receive your ITIN.
Both TINs and ITINs enable more people to pay into the system which helps to build the federal and national tax base. For example, the IRS notes that in 2015, “4.4 million ITIN filers paid over $5.5 billion in payroll and Medicare taxes and $23.6 billion in total taxes.”
So, let’s take a look at how you can go about acquiring a TIN or ITIN…
How do you get your Taxpayer Identification Number?
Thankfully, the process of getting your TIN or ITIN is quite simple. Let’s focus on the ITIN. In order to receive your identification number you need to complete the IRS Form W-7, IRS Application for Identification Number. This form requires you to submit documents showing your foreing status and your true identity.
There are a few ways to submit your information. You can mail the documents, along with your Form W-7, to the address shown in the Form W-7 instructions. You can also present all of these documents at an IRS walk-in office in your local area. Alternatively, you can process your whole application through an Acceptance Agent that is authorized by the IRS.
What’s an Acceptance Agent? Well, an Acceptance Agent can be a college, financial institution, accounting firm or another official entity that is authorized by the IRS to help applicants in getting their ITINs. They will review your documentation and forward the completed Form W-7 to the IRS for processing.
So you’ve sent off your documents, how long do you have to wait before you get your number? In general the IRS will assign you with a tax identification number within seven weeks if you qualify for an ITIN and your application is fully complete.
In some cases a foreign individual does not have to provide a U.S. TIN to claim a reduced rate of withholding, such as when:
- The income is from marketable securities
- There is an unexpected payment to an individual
What can you do once you’ve got your Taxpayer Identification Number?
So, you’ve finally received your taxpayer identification number. What’s next?
Well, as the name suggests, TINs and ITINs are all about tax. The only purpose of these taxpayer identification numbers is to assist with federal tax reporting. An ITIN does not authorize you to work in the U.S. Equally an ITIN does not work to provide you with legal immigration status and, in general, cannot be used to prove that you are legally residing in the United States.
However, having an ITIN can be useful in other ways, especially if you do not have a Social Security Number (SSN). For example, you may be able to open an interest-bearing bank account if you have an ITIN but you don’t have an SSN. Equally, in some states an ITIN can be used instead of SSN to receive your driver’s license, state identification card, or driver’s permit. While in general an ITIN is not used for residency matters, having a tax return filed using an ITIN is one way for an immigrant to show and prove how long they have been in the United States.
To learn more about what you can and cannot do with your Taxpayer Identification Number visit the website of the AmericanImmigrationCouncil.org.
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