Tax Tips for U.S. Americans Abroad
If you do not have a Social Security Number (SSN) and need to file US expat taxes, you can apply for an ITIN. An ITIN is an Individual Taxpayer Identification Number, and it is only used for filing taxes. For example, you can be an Accidental American, living abroad with no US passport and need an ITIN.
Plus, there is a lot more about the purpose of ITINs, which we’ll highlight below:
Individual Taxpayer Identification Number Basics
As stated, an ITIN is simply for the purpose of filing US taxes, and are for individuals who are not eligible or have a Social Security Number, but need to file US taxes. This goes for both resident and non-resident aliens (US foreigner) who have US tax filing requirements under the Internal Revenue Code.
Keep in mind, that having an ITIN does not grant you work access or legal status into the US. Nor it provides the opportunity to receive SSN benefits!
Individuals need to file US taxes with an ITIN for the following reasons:
- If they are a student and need to report grant and scholarship receipts
- Are a US resident foreigner and need to claim dependents
- Filing a joint return if you have a spouse with a Social Security Number
- Are dependent of a spouse who is a non-resident alien visa holder
- Are claiming a tax treaty as a US non-resident
- If they are working as a contractor or contractor for a foreign company and need to report US-sourced wages
If you find yourself in a situation where you need to become tax compliant with the IRS and are a US non-resident, you’ll have to apply for an ITIN as soon as possible.
Applying for an ITIN
If you want to apply for an ITIN, you’ll need to go on the IRS website and fill out the Individual Taxpayer Identification Number Form W-7. Then you will need to attach the completed form with:
- Your US tax return (Form 1040, what an American expat also fills out)
- Any required documentation needed to verify your identity
- Documentation that confirms your foreign status (issued by a certified agency)
Then you can mail this to the W-7 office at:
Internal Revenue Service
Mail Stop 6090-AUSC
3651 S. Interregional Hwy 35
Austin, TX 78741-0000
You need to make sure you are submitting the W-7 Form with your tax return by April 15th. If you miss the deadline, for filing and/or paying US taxes, penalties and interests for lateness may be imposed onto you.
New Method to Receive ITIN
There is a new method recently added by the IRS when it comes to obtaining an ITIN. Taxpayers can visit a US-based Certified Acceptance Agent – or CAA – overseas. These people are authorized by the IRS to help foreign people who need a taxpayer identification number but are not eligible for a Social Security Number. This may be easier for people than completing their form manually.
Do ITINs Expire?
ITINs can only expire if you as a holder do not file your US taxes, or were not included for three consecutive years as a dependent on another person’s tax return.
This means, if over the past three years you have not been using your ITIN on a federal tax return at least once, it’s no longer valid. Otherwise, all ITINS that were issued before 2013 with 83, 84, 85, 86, or 87 as middle digits (like XXX-83-XXX) are expired.
Need to File US Taxes with Expired ITIN?
You’ll need to go through the renewal process again if you need to file US taxes with an expired ITIN. Remember to submit your application with your tax return if you are residing outside of the US. Otherwise, you cannot renew in advance!
However if you filed a tax return and your ITIN is expired, the IRS won’t place failure-to-file penalties on you. Those penalties are more if a US citizen abroad fails to file or pay US taxes. However, you cannot process tax exemptions or be given tax refunds or credits claimed until your ITIN is renewed.
When your ITIN renewal application is accepted, the IRS will send a mailed notice to you. This confirms your Individual Taxpayer Identification Number is renewed.
For more important information regarding this point, please visit this IRS page here.
More Expat Taxes Support
We work with US non-residents and ITIN taxpayers weekly through our expat tax service and software. Contact us today, or leave a comment below if you have any questions. Otherwise, just sign up on the MyExpatTaxes tax software app, and file in less than 30 minutes. Join your fellow American abroad and we’ll show you the way to tax compliance!
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