Your ITIN, or Individual Taxpayer Identification Number (ITIN), is crucial for filing US taxes as a non-resident alien. It ensures that you can meet your tax obligations even if you do not have a social security number.
However, did you know that this ITIN can also become expire? Those ITINs which were issued before 2013 need to be renewed over time specifically when they have not been used during the last three years consecutively in any given federal tax return. To retain IRS compliance, one will need to renew an expired ITIN.
Read further to find out more about reviving your ITIN.
What is an ITIN?
An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS). It’s used by individuals who are required to obtain a U.S. taxpayer identification number but may not possess and cannot apply for it due to Social Security Number (SSN) related issues
This makes it possible for them to pay their taxes, avail themselves of tax treaty benefits, and get refunds of income tax charged to them. Remember that this does not relate to employment or eligibility for Social Security benefits
Why Renewing Your ITIN Is Crucial
1. Ensure Tax Compliance
For instance, if your child’s dependents qualify for the Child Tax Credit or American Opportunity Tax Credit, then your federal tax return must be accompanied by these numbers.
2. Prevent Processing Delays
After every three years without use on any federal income tax returns; an ITIN expires according to the current IRS regulations. If your ITIN has expired, the IRS may delay processing of the tax return and any refund until it is renewed.
3. Avoid Penalties and Interest
However; some credits such as child credit may never apply if one uses dead numbers while recalling his/her individual duty implications due from payment arrears made on those duties by the Internal Revenue Service. Therefore, any payment of monies one owes the authority shall be subject to interest and fines. Renewing your ITIN ensures you remain compliant and avoid these additional costs.
4. Access Financial Services
Besides opening accounts, getting loans, or even credit cards; most financial institutions require a valid ITIN. Limited access to vital financial services is an effect of having an expired ITIN.
5. Maintain Employment Eligibility
This may affect your job status if it is no longer valid and you use it for employment-related purposes. It thus becomes necessary for you to ascertain that your ITIN is up-to-date so as not to lose out on working opportunities.
6. Support Your Family
Each dependant claimed has to have a proper ITIN allocated by the IRS, too, because tax return demands it to claim them legally. Expired ones relating to your children can create circumstances where they cannot be included in the return thereby reducing overall benefits from taxation processes.
When Does an ITIN Expire?
Your ITIN becomes invalid when one hasn’t used it on a US tax return thrice in three years back-to-back. This means that if you do not file your federal tax return including the number for three years consecutively then the taxpayer identification number gives up being active automatically.
The IRS has announced that, within a given year it falls within one of the particular ITIN ranges due for expiration. The IRS occasionally reviews and announces ITIN ranges that are soon to expire thus requiring individuals to renew their ITINs so as for them to remain valid. This ensures that all ITINS are current and aids in preventing identity theft.
How to Renew your ITIN
Step 1: Collect the Necessary Documents
To renew the ITIN, you will be required to submit a complete Form W-7 including all the necessary documents. Ensure you have:
- A valid passport or any of two (one with a photo): national ID card (from your country of origin), U.S. driver’s license, birth certificate, foreign voter registration card, military ID card, or U.S. state identification card.
- Proof of your U.S residency.
Step 2: Fill Out Form W-7
- Fill out the Application for IRS Individual Taxpayer Identification Number (Form W-7). This form can be downloaded from the IRS website. You are expected to:
- Indicate that you are applying for renewal by ticking on the relevant box.
- At the top of the form, put your current ITIN.
- Give accurate complete information not different from what is in your supporting documents.
Step 3: Submit Your Application
You can choose any of these methods while submitting your application:
- Mail your IRS Form W-7 together with all supporting documents to this address:
Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
- Certified Acceptance Agents (CAAs) or Acceptance Agents (AAs) may verify your identity documents instead of having them mailed to the IRS in their original form. You can find CAAs or AAs near you on the Internal Revenue System’s website.
- Visit an IRS Taxpayer Assistance Center (TAC) where employees can help you with the process and find TACs closest to where you live.
Step 4: Wait for Your ITIN to Arrive
Expect a correspondence confirming that your ITIN has been renewed as soon as you submit it; this takes up to seven weeks or less than three months hence plan when filing taxes carefully so that it is not interrupted.
Tips for a Smooth Renewal Process
- Double Check Your Application: All details should be accurate and the required documents attached to avoid any delays.
- Keep Copies: You can have your Form W-7 plus all documents as part of your records.
- Apply Early: Make sure you renew your ITIN well in advance before it gets too late. By early renewal, you will avoid any possible delay that could happen while filing the tax return.
Conclusion
To remain on the right side of tax laws, prevent financial penalties, access financial services and confirm employment authorization status call for immediate action now to renew your ITIN lest we wait until the last hour and hence lose our status in the US legally and financially.
For help with renewing or applying for an ITIN, please consult a tax professional(EasyFiling) or an IRS-authorized Certified Acceptance Agent (CAA).
Nabin Adhikari
