Not everyone has heard of an ITIN or knows what it is.
ITIN stands for Individual Tax Identification Number. The tax processing number, issued by the IRS, is available to nonresident immigrants and others who aren’t eligible to receive a social security number. By having an ITIN, individuals can become contributing members of the US and build a new life in a different country.
Filling out an ITIN application and acquiring the number is a significant boon for immigrants who reside in the US but haven’t yet obtained legal status. They’re accustomed to facing language and cultural barriers and encounter societal bias and discrimination. So getting a taxpayer number provides hope when the chips are down and it’s hard to see a way beyond troubles.
Why the IRS created ITINs and how to use them
In July 1996, the Internal Revenue Service created the ITIN program so foreign nationals and others could legally pay taxes they owed. This was a smart decision not just to benefit immigrants but to help boost the US marketplace.
According to the National Immigration Forum, it’s estimated that the immigrant community-contributed 328 billion in state, local, and federal taxes to the US economy in 2014. Furthermore, undocumented workers represent at least 5.6% of the US workforce.
Not only do immigrants pay taxes but they spend the money they earn which helps grow their local economies.
The American Immigration Council reported in 2015 that 4.35 million people used an ITIN to pay 13.7 billion in federal tax. Likewise, the New American Economy reported in 2017 that 3.2 million immigrants ran businesses and employed 8 million American workers.
An ITIN does not authorize anyone to work in the US or provide legal immigration status. Neither does an ITIN qualify a taxpayer’s dependents for the Earned Income Tax Credit or for individuals to receive social security benefits. Moreover, holding an ITIN doesn’t mean you receive the same tax and public benefits US citizens receive. However, it’s possible to receive the Child Tax Credit based on a tax bill passed in December 2017.
To be sure, the IRS doesn’t use an ITIN to track unauthorized immigrants. They respect each taxpayer’s privacy whether they have an ITIN or a social security number. Some states recognize the challenges immigrants face and allow ITIN holders to receive a driver’s license, a state ID card, or a driver’s permit.
With an ITIN, individuals can legally report income earned and pay taxes when owning a business, open a business checking account, and establish a credit history to obtain a loan.
By being able to qualify for a business loan, immigrants have the capital to grow their businesses and provide employment for those needing jobs. It’s equally important to note that by filing a tax return using an ITIN, an immigrant can prove how long they’ve been in the US.
The future is very diverse
Foreign entrepreneurs are an integral part of the United States economy and make significant contributions.
When individuals and communities embrace immigrants with welcome arms, they admire their perseverance and strength to overcome obstacles. That’s because foreigners have the same hopes and dreams as US citizens.
They want their children to succeed in school, live in nice homes, own vehicles, and enjoy prosperous lives.
So, yes. Immigrants can own businesses in the US and become successful business owners. If you need to apply for an ITIN or know someone who does, don’t delay to find out how to submit an ITIN application.