The US Internal Revenue Service (IRS) records individuals and legal entities. It uses personal identification numbers. In turn, for individuals, a tax number is issued, referred to as ITIN (Individual Taxpayer Identification Number), and legal entities are assigned an EIN (Employer Identification Number) tax number.
ITIN is different than EIN (Employer Identification Number).
EIN identifies the company in the banks, tax authorities, and other organizations. The US Federal Tax Service issues it for companies. In some cases, it can be assigned to self-employed persons. But in any case, ITIN is required for reporting. Even if you obtain an EIN, it does not play a key role in filing an annual tax return for a self-employed person. It is also essential that the national service issues EIN and does not depend on the company’s state of incorporation.
Who can get a tax number? Nowadays tax numbers can be taken by both American residents and non-residents. But individuals sufficient to have an SSN (Social Security Number) are an exception as it is interchangeable with an ITIN and provides even more opportunities in the United States. But, far from everyone can apply for an insurance number. The list is limited to non-residents. At the same time, SSN is confidential information, so many business people prefer to get an EIN for a company and use it openly for commercial purposes.
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Why do you need a US tax number?
A company requires an EIN for:
- Communication. Cooperation with the American tax office includes it. It’s important for filing declarations, reporting, tax forms, changes in the form of ownership, type of organization, etc;
- Presentation. Creation of a trust is possible only if there is no doubt in reliability;
- Opening a local bank account;
- Employment of residents in the company. Basically, it is the number of the employer;
- Regulation. This number is highlighted in all business documentation, so it can increase the prestige if the company. It works on the legality and transparency of the business;
- To distinguish between business activities and personal finances.
How to get ITIN/EIN number in the USA?
First of all in order to obtain a tax number for an individual or legal entity should be submitted the appropriate form to the IRS. To carry out this procedure there is no need for a personal presence in the country. It’s available remotely.
W-7 form, tax return, and identification documents are submitted to obtain an ITIN number.
Form SS-4, in which all data on the company are entered, is submitted to obtain an EIN for a company
The correct complement of these forms is a must. As for the submitted documents to the IRS, they must strictly correspond to all the requirements. Otherwise, if there is even the slightest discrepancy, the tax office will immediately refuse to obtain a tax number. Therefore, it’s strongly recommended to look for the help of specialists. It will help you avoid refusal. In this case, you can ensure you receive the necessary tax number.
The tax office thoroughly checks the documents and then sends the assigned number by mail. Also, he adds such a document called a Tax letter.
It should be remembered that EIN for any legal entity is assigned once. EIN has no expiration date. As for the ITIN number for individuals, it has a validity period. Also, it requires submitting a form for its renewal, which the tax office notifies in advance.
What documents are needed for ITIN?
In most cases, to get an ITIN number, it’s necessary to provide the original identity document. If you don’t have it, a notarized copy can be used. There are accredited accountants with a CPA license. They have the right to issue an ITIN without providing original documents.
Pay attention to the list of required documents:
- Color image of the current foreign. passports (photo page, full spread);
- Full address of residence in Latin;
- Phone number;
- Data on the registered company – copies of:
– Article of Organization / Incorporation,
– Operating Agreement / Bylaws (with a mention of the founder and EINs, as well as with the signature of the founder),
– An EIN issued in the name of a company (CP Form 575 G or Letter C147 Form).