An Individual Taxpayer Identification Number (ITIN) is a unique identification number assigned by the Internal Revenue Service (IRS) to individuals who are required to have a taxpayer identification number but do not have, or are not eligible to obtain, a Social Security Number (SSN). The ITIN is used for tax purposes and is required for certain tax-related transactions. However, ITINs are assigned for a specific period and need to be renewed periodically to maintain their validity.
If an ITIN is not used on a federal tax return at least once in the last three consecutive years, it will expire. Additionally, ITINs that have the middle digits of 78 or 79 will expire at the end of 2021. It’s important to renew the ITIN in a timely manner to avoid any delays or complications when filing taxes or carrying out other tax-related transactions.
This guide will walk you through the renewal application process of your ITIN. From determining if your ITIN needs to be renewed, to gathering the necessary documentation, and submitting the form and federal tax return. By following this guide, you can ensure that your ITIN renewal process is smooth and without any delays.
How to renew your ITIN?
To renew an ITIN (Individual Taxpayer Identification Number), individuals must complete and submit Form W-7 to the Internal Revenue Service (IRS), along with the necessary documentation and a federal income tax return. Here is a step-by-step guide on how to renew an ITIN:
Determine if your ITIN needs to be renewed: An ITIN is valid for a specific period of time. If it has not been used on a tax return for at least three consecutive years, it will expire.
Gather the necessary documentation: Depending on your citizenship and residency status, you may need to provide proof of identity and foreign status. Examples of accepted documents include a passport, birth certificate, or national identification card.
We’ve been getting a lot of inquiries about tax refunds for U.S. citizens who live abroad. If you live in the U.S., your refund would be directly deposited to your account. Once you move overseas, receiving a refund becomes more complicated as many U.S. Expats no longer keep their U.S. bank account.
Since the refunds cannot be deposited to a foreign bank account, taxpayers living overseas receive a check instead. However, these can take month to arrive. There are few things you can do to ensure you receive your refund faster.
Receiving A Tax Refund For U.S. Citizens Abroad
Receiving a tax refund is surely the best thing about filing your U.S. Expat Tax Return. You cannot imagine how much joy it brings us to inform our clients they’re now not only compliant, but they are actually due a refund. Many taxpayers are simply not aware of the credits they are eligible for. The additional child tax credit is the most common example of a tax credit U.S. expats don’t know about.
Although many expats receive refunds every year, there are ways to speed up processing of your refund. Most U.S. citizens abroad receive their refund in a mail, often waiting even months for their checks. In this blog post we’ll discuss the ways to ensure your refund isn’t delayed.
Are You Entitled For A Tax Refund When You Live Abroad?
Even if you’ve moved abroad for a brighter future, you still might have obligations towards the IRS. What happens if you earn income from sources outside the United States? If you live abroad, you might qualify for the foreign earned income exclusion (FEIE). This article explains what FEIE is and how it works, and provides some examples of situations where you might benefit from claiming it.
The U.S. retains its right to tax citizens and Green Card holders who live abroad and they must file their taxes even if they’re not physically present in the country. The foreign earned income exclusion (FEIE) allows U.S. taxpayers to exclude from their taxable income certain amounts they earn outside the United States. The FEIE was created in 1954 to relive American Citizens from the burden of double taxation when they move overseas.
What is the Foreign Earned Income Exclusion?
Generally, if you are a United States citizen or permanent resident (Green Card Holder) living outside the United States for more than one year, you are called an expatriate or “expat.”* Rather than adding to the long list of tax guides that explain the general concepts of expat taxation,** we will focus on the specific requirements to file several US international tax forms, not well known. These are forms not well known, but they carry huge penalties for excluding or screwing up.
We will give you a general understanding of the following United States IRS Tax Forms:
2021 is ending and 2022 is coming. Post-holiday is tax filing season and Americans living abroad need to file their taxes. Just like Americans living in the United States, federal tax returns are filed every year. However, applying from abroad is more complicated. Below is new information about the taxes collected abroad for 2022 that Americans file with the United States.
Some things stay the same
First, it might be helpful to look back at what’s not new for Americans overseas in 2022.
Americans living abroad must submit US tax documents and report that foreign accounts, assets, and businesses remain unchanged. This year there was hope that President Biden’s tax reform might be accompanied by some kind of exemption for Americans living abroad, but that has not materialized.
How would you feel if you found your bank account frozen? After all the sweat and the sacrifice, you make after hours of working and putting together all your resources only for the IRS (Internal Revenue Service) to freeze them. Can the IRS freeze your foreign bank account?
When you delay paying your taxes, the IRS can access your bank account, savings, or assets such as a house or a car. They can take your salary before it gets to your pocket. Two, they can place a tax lien on your personal property. Finally, they can freeze your bank account and use the money to pay your tax due. When you move overseas, the IRS does no longer has such power.
However, don’t believe that your money is safe just because it is in an offshore bank account. The IRS can issue a levy to any bank within the US. If you’re an account holder of a foreign bank that has a branch in the US, the IRS can easily issue a levy notice to the US office and empty your account overseas.
Prologue – The Only Certainties Are Death And Taxes
The above tweet references an article in the Globe and Mail on May 7, 2020. The article contains interesting perspectives, but much has changed since that time.
COVID-19 And The Role Of Government Assistance
The community of tax professionals on www.taxconnections.com offers great knowledge and expertise. We noticed one of our members Gary W Carter has this fun analyzer that does not ask you your name, maintains your anonymity and tells you whether you need to file as either a non resident alien, resident alien or dual status alien when filing a U.S. tax return.
I took the quick analyzer test myself, even though I am a U.S. citizen born and living here simply because I wanted to know the value for our worldwide visitors and readers of TaxConnections Blogs. If you have the same question regarding your filing status as an alien tax filer, you will appreciate this quick and private analyzer.
Click Here To Determine Your Alien Tax Filing Status.
You Remain Anonymous!
International Taxpayers Extension Request is for US taxpayers residing outside of the USA. Your 2018 income tax forms are due June 17th 2019. That date is coming up here soon and it usually catches people off guard.
If this might be you, worry not… Simply File IRS Form 4868 for automatic extension of time to file US individual tax return.
Filing this form gives you an additional 4 months (until October 15th) to file your income tax forms. However you still must estimate what your federal income tax liability will be and get that payment into the US Treasury ASAP. That payment was actually due April 15th 2019.
If you live outside of the US you should not be penalized for late payment if you pay by June 15th, but you will be assessed interest for the late payment.