Noteworthy Benefits of having an ITIN for non-US residents?
Individual Tax Payer Identification Number (ITIN) is a significant tool for non-US residents. ITIN benefits thosenon US residents those who have tax and financial obligations in the US.
ITIN is issued by IRS. ITIN enables individuals who are not eligible for SSN to comply with the US tax laws. The main purpose of ITIN is tax reporting, it offers many benefits for non-US residents.
The Benefits offered by an ITIN for non US residents are-
- Fulfill US tax obligations: ITIN ensures the non US residents can meet their tax obligations even if they are not eligible for SSN. Whether you are working as a contractor, or earning income from the US based investments or claiming treaty benefits, an ITIN number will allow the individual to file federal tax returns and avoid huge penalties or potential legal issues with the IRS. By staying compliant with US tax, the individual can benefit having positive standing in financial and legal matters.
- Claiming tax treaty benefits: Many non-US residents are eligible for tax treaty benefits that minimize or eliminate certain tax obligations. For instance if the US expats are living in a country that has entered into a tax treaty with the US, they can avoid double taxation on specific income types. ITIN is required to claim these benefits ensuring the non US residents do not pay more taxes than required.
- Access to refunds: If you overpay taxes to the US government, an ITIN enables one to claim tax refund. Non US residents who engage in temporary work or invest in the US may be entitled to a refund after filing their tax returns. Without an ITIN, accessing these refunds would not be possible.
- Facilitating real estate investments: One of the significant benefits offered by the ITIN for non US residents are it facilitates real estate investments. Those American expats seeking to invest in the US real estate need ITIN number. Whether buying property or renting it out, the ITIN allows one to report the rental income and pay the associated taxes. This is important for non-compliance with the US tax laws, ensuring smooth transactions in the US real estate market.
- Business opportunities: The US expats involved in sole proprietorships or partnerships in the United States of America may need an ITIN number to report their share of income and expenses. For small business owners and entrepreneurs, ITIN number is mandatory to tax compliance, helping build a base for legitimate business operations.
- Support dependents: A non US residents with dependents who qualify for tax benefits can claim those on their tax return with an ITIN number. ITIN thus helps US expats to potential tax savings, making it easier to manage their financial responsibilities while supporting their family.
For US non residents, ITIN number is more than just tax reporting tool. IT opens door to various financial and legal benefits. Work with a professional tax expert to obtain an ITIN number and understanding its benefits.
also read: Itin V/s Ssn: What’s The Difference And Which One Do You Need?
