Having ITIN Can Decrease Your US Tax Liability - H&R Block India
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How ITIN Can Decrease Your US Tax Liability

One of the signs of maturing into adulthood is becoming a husband/wife first, followed by parenthood, when your newborn is placed in your hands.  Following this rite of passage, the earning member of the family will undoubtedly start to plan for their future including tax planning and adopting tax saving schemes/investments.  For working individuals either residing in the US with their family (spouse and children) or have recently returned to India and need to file their US tax return, having an ITIN for your dependents will help you keep more of your hard-earned dollars in your pocket.


An individual taxpayer identification number (ITIN) is used for tax processing purposes, issued by the IRS.  The nine-digit number came into effect April 12, 2011 and can be issued to both resident and non-resident individuals who need to file their US tax returns.  The ITIN is issued to individuals for tax filing purposes, who are not eligible for a Social Security Number (SSN).  Additionally, the ITIN is used only for tax reporting whereas an SSN allows the individual to work in the US.


And ITIN can be issued to:

  • Foreign nationals
  • Nonresidents needing to file US tax returns to claim a refund but do not have a SSN
  • Dependents or spouse of US resident and nonresident
  • US resident filing a US tax return

If you are currently residing in the US with your family or have recently returned from working in the US for a period of six months or longer and need to file your US taxes, having an ITIN for your spouse and children will help reduce your tax liability.  By applying for an ITIN for your dependents you can claim exemptions beyond your basic exemption limit.  Applying for an ITIN is a simple process and can be done in conjuncture with your tax filing.


You can submit your ITIN application (W-7) along with all relevant supporting documents together with your federal tax return, as soon as you are ready to start filing.  Since this is not like your regular tax return, you need to send it to a different address than the one mentioned for a regular tax return.  However, you can save time by availing the aid of the US tax experts at H&R Block India to help with your US tax return filing, so that you can take advantage of the maximum number of allowances/exemptions allowed to you.


The experience of working abroad is an enriching experience, one that should not be shadowed by the worries of complying to the different tax laws of each country.  Filing your tax returns is simply another rite of passage you need to pass through in your adulthood to becoming not only a provider for your family but a responsible citizen also.

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Mohammadfaruq Memon
Mohammadfaruq Memon
Mohd. Faruq Memon is the Head of U.S. Expat Tax Services at H&R Block (India) with an industry experience of fifteen years. He holds a masters-level qualification and his expertise lies in Dual Taxation. On weekends, Faruq is a movie buff who also enjoys watching cricket!