If you do not have a social security number for some reason, the IRS does not want this to stop you from reporting the taxes you earned during the year. This IRS Taxpayer Identification Number or ITIN program allows people who do not have a social security number to declare income. The IRS does not separate declared income; it only wants all the people who have to do it by law.
Here are eight of the most frequently asked questions about the IRS Taxpayer Identification Number and their answers according to the latest IRS information available on their website. These questions and answers about the ITIN will help those who need to use it to file taxes using the IRS Taxpayer Identification Number.
What is the ITIN used for?
ITINs are for tax reports only and are not intended to serve any other purpose. The IRS grants ITINs to help individuals comply with the tax laws of the United States. An ITIN does not grant the right to work in the United States, nor does it grant the possessor social security benefits or the Earned Income Credit (EITC).
Can I work with an ITIN?
No, it’s just a number to declare your taxes.
How do I apply for an ITIN?
Use the Form W-7SP, Individual Taxpayer Identification Number Application, to request the ITIN. Attach a valid federal declaration unless you qualify for an exception and include your original documents or certified documents proving your identity and documents proving your alien identity.
Can I present a copy of a notarized passport to apply for an ITIN?
No, the new changes to the rules to apply for the ITIN do not allow the document to be issued with a notarized copy. Only original documents or certified copies are accepted by the government agency that issued them.
Why should I not receive US benefits as undocumented should I declare my taxes?
One of the reasons why you should do it is because this is the tax law. If you earn money in the United States, you have to declare your income and pay taxes. The second reason that much is talked about is possible immigration reform. Nobody knows if this will happen or not, or when, but you have an idea that the requirement to prove that people were in the United States for a certain amount of time will be the tax return. At least they will ask the question: are you up to date with all your tax obligations?
Do I qualify for a tax credit with the ITIN?
The ITIN automatically disqualifies the taxpayer from being eligible for the earned income credit or earned income tax credit. However, if your child has an ITIN number, you may qualify for the child tax credit or the American Opportunity Tax Credit post-secondary school credit.
How do I report my income with an ITIN and a fake SSN?
A tax preparer or the program you use to fill out your return will allow you to adjust, reflect that this income, even if declared with a false SSN, is the income you earned. Check with your tax preparer to help you through the process.
How do I report my income if I work on my own?
If you work on your own, you are considered a small business. To be able to declare your taxes, you should take information about your income and expenses. Income and expenses should be accompanied by evidence and receipts if the IRS is urged to audit your return. You do not have to have anything fancy; you can have a notebook or record to keep track of your expenses and income. Better yet, if you could open a bank account specifically for your business transactions. Many banks allow people with ITIN to open a bank account.
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