Did you know you need to have a social security number (SSN) to conduct business in the US?
This nine-digit number issued to all US citizens and eligible residents is a crucial requirement when applying for credit cards, bank loans and even when registering a new business. You also need an SSN to pay your taxes and contributions towards social security.
The US government uses your number to calculate social security and disability benefits when you retire.
But what if you are a foreigner who intends to start a business in the US?
How will you adequately make your tax contributions?
This is where an ITIN comes in handy. If you are not eligible to receive a social security number from the social security administration (SSA), your only other option is to file an ITIN application. With this number, you’ll be able to have a business, pay your taxes, and even apply for small business loans with certain lenders, like Camino Financial.
What is an ITIN?
ITIN is an acronym that stands for an Individual Taxpayer Identification Number. This is a unique number issued to those who are not eligible for a social security number. It was created by the IRS in 1
If you are a foreigner required to have a tax payer’s identification number, but ineligible for an SSN, then you must have an ITIN. This number is issued by the IRS to help individuals comply with US tax regulations.
ITIN serves no other purpose than reporting federal tax. Unlike popular belief, you cannot use it to authorize work or provide eligibility for qualifying for a social security number. The IRS issued this identification number to both residents and nonresidents regardless of immigration status.
You may need to have an ITIN if you do not have a social security number and are not eligible to receive one. The number can help you:
- if you are required to provide a tax identification number
- file your taxes
- file a tax return
- want to claim exception
- want to claim tax treaty benefits
You can get an ITIN if you are
- a nonresident alien
- a US resident alien
- married to a US citizen or resident alien
- married to a nonresident alien with visa
- a nonresident alien researcher, professor or student
- a nonresident alien
With an ITIN, foreigners can become business owners in the US and conduct their operations just like citizens.
Can I get a small business loan with an ITIN?
Most banks and credit card issuers require your social security number to issue credit cards, debit cards. SSN is also part of the eligibility requirements lenders will ask for before considering you for a loan. You will also be asked to provide proof of business and income.
As a business owner ineligible to obtain a social security number, you need to apply for an ITIN to access these essential services. Once you have an ITIN, you can compare existing business loan offers that suit your goals. According to experts, lenders will offer loans based on your business strength.
Bear in mind that not all lenders will approve a loan if you only have an ITIN, but don’t worry, some will.
A Number That Helps Everyone Stay Compliant With Taxes
ITIN should not be mistaken for an SSN equivalent.
A social security number has a broad range and may be requested when applying for employment, federal loan or passport, opening a bank account, enrolling for Medicare, driver’s license and other public assistance. There is no way around this if you are a nonresident who wants to become a business owner in the US.
On the other hand, an ITIN can be helpful if you want to file tax returns, claim certain benefits or access business and loan products as a foreigner.