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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22844
Experience:  Taxes, Immigration, Labor Relations
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Hello, I am a non-resident alien who is filing to create an

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Hello, I am a non-resident alien who is filing to create an LLC in Delaware. I then need to get an EIN, however I first require an ITIN. I am trying to fill in the W7 ITIN form, however I am unsure of one section hence my question to you. The first section asks for the reason, to which I am answering "h" (Other). The other options don't seem to fit. However, I am not sure which exception category I fall under as nothing seems to perfectly match. The closest I can see is Exception #1 (a) Third Party Withholding on Passive Income. Is this correct? Basically my question is which answer is correct for me and what supporting documention should I provide in my particular exception case?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).

You do not need ITIN to create an LLC in Delaware.

In your situation you likely need to check (b) - Nonresident alien filing a U.S. tax return.

 

IRS will accept certified or notarized copies of a combination (two or more) of the following documents, in lieu of a passport:

  • National identification card (must show photo, name, current address, date of birth, and expiration date)
  • U.S. driver's license
  • Civil birth certificate
  • Foreign driver's license
  • U.S. state identification card
  • Foreign voter's registration card
  • U.S. military identification card
  • Foreign military identification card
  • Visa
  • U.S. Citizenship and Immigration Services (USCIS) photo identification
  • Medical records (dependents - under 14 years old - only)
  • School records (dependents and/or students - under 18 years old - only)

Please let me know if any clarification is needed. What type of visa do you have?

Customer: replied 5 years ago.

Hi, thanks for the fast reply.

 

I don't have a U.S. Visa as I don't live or work in the U.S. however I am filing for an LLC as I will be conducting business in the U.S. (remotely, as it's an e-business).

 

It was my understanding that to get an EIN I first need an ITIN though? Furthermore I thought

 

Regarding answer 1 (b) I don't yet have any income in the US so won't be filing a tax return yet. It seems that all of the options except h) Other require a tax return to be submitted with the W7. If I choose b) should I also be submitting a tax return and if so I'm not sure what I should be filling in since I haven't actually got any income in the U.S. yet? Should I be filling one in and sending it anyway?

 

Thanks again.

 

Expert:  Lev replied 5 years ago.

If you will not file the US tax return - I do not see a reason to apply for ITIN...

Does anyone require you to have ITIN?

Customer: replied 5 years ago.

Sorry, I just meant that I thought I don't need to file a tax return yet as I haven't actually opened the business yet. I was planning to file a tax return after I had setup the entity and started using it to do business and earn an income through it. At the moment I'm trying to set everything up but haven't sold anything yet.

 

One of the main components of the setup (and why I want the ITIN and EIN) is to open a U.S. corporate bank account, for the LLC. Many U.S. suppliers I want to work have said they require this. Also without it I'll need to pay quite a bit on the constant wire transfers from my foreign account. With the business model I'm planning to use it will be too expensive without it.

 

So, from the post above do you mean I should file a tax return for the LLC with the ITIN application (and give the reason as b) but declare that I had no income? Or only apply for an ITIN at the time I need to file a tax return? If I do the latter I won't be able to do business though, so I'm wondering what to do as it's not so clear how I can set this up

 

Thank you for any assistance you can give in helping to clear this up as I'm a bit confused as to how to do this.

 

Regards,

Expert:  Lev replied 5 years ago.

I suggest you following references for starting the business

As a single member LLC - you generally report all income and expenses as solo proprietorship. However as your LLC will have several members - it will be a partnership and should file form 1065 - http://www.irs.gov/pub/irs-pdf/f1065.pdf with schedule K-1 - http://www.irs.gov/pub/irs-pdf/f1065sk1.pdf reported income passed through to members..

 

If LLC elects to be an S corporation by filing Form 2553 - http://www.irs.gov/pub/irs-pdf/f2553.pdf - it will file same forms as S-corporation.

 

The business income and expenses will be reported on the schedule C - http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

The income/loss will be reported on the form 1040 line 12 - http://www.irs.gov/pub/irs-pdf/f1040.pdf

 

So the main reason to have ITIN would be as I mentioned - (b) - Nonresident alien filing a U.S. tax return.

On the other hand - you may open the bank account for LLC based on EIN you will obtain for LLC. If you are using a service to create LLC - ask if they will open the bank account as well.

 

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22844
Experience: Taxes, Immigration, Labor Relations
Lev and 7 other Tax Specialists are ready to help you
Expert:  Lev replied 5 years ago.

If you will not file the US tax return - I do not see a reason to apply for ITIN...

Does anyone require you to have ITIN?

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