Many traditional tax preparers overlook a very complementary business line that could be adding thousands to their bottom line. This business line is ITIN Application Service (Individual Taxpayer Identification Number) processing. These numbers allow undocumented immigrants the ability to file tax returns along with many other benefits. If you are running a tax prep office and are not already taking advantage of offering this service. Be sure to review this material and make sure you are not missing out!
What is an ITIN?
An ITIN is an Individual Taxpayer Identification Number. These numbers are issued to non-citizens that want to file US tax returns or want to be listed as a dependent on a US tax return. There are additional benefits that are available to ITIN holders beyond being able to file for a tax refund, such as the ability to enter into a home mortgage, the ability to incorporate a business in the United States, and the ability to register for certain health and other insurance plans.
What an ITIN is not!
- An ITIN does not license undocumented aliens to work legally in the United States.
- An ITIN is not a Social Security Number.
- An ITIN is not a business or corporate tax identification number.
Why should I offer ITIN services at my tax business?
- ITINs go hand-in-hand with tax preparation, as they are required to be submitted along with a tax return.
- ITIN services not only allow you to expand your existing customer base, but allow you to offer more services to your existing customers. Just because your client might have a social security number, that does not mean that his or her dependent or spouse also has one. Your client can claim dependents living in Mexico or Canada on their tax return, if those dependents have ITINs.
- ITIN clients typically require multiple years of tax preparation services. A common scenario is, a client has worked in the US (using another person’s SSN, or by operating their own business) for several years, but has not filed returns for those years.
- ITIN applications are submitted via paper filing processes only. This means, that you will typically not have any additional per return fees from your software vendor for ITIN processing.
- You do not have to speak multiple languages to be able to complete an ITIN application. The application process is most similar to tax preparation, and form is completed in English. However, it is easier dealing with the immigrant client base if you or an employee does speak the clients’ native tongue.
- Offering ITIN preparation services provides good will for your existing tax preparation business. You are helping clients get back tax refunds that they typically would never get. Even if someone is working under someone else’s SSN they are entitled to get the payroll taxes they paid in back. Pending their income tax bracket and amount of dependents and deductions.