Why Is US Company Formation And Tax ID Application Important For Non-residents In The US?

Quick answer: Non-residents who run a blog, sell on Amazon or otherwise earn from the US often need a US company and a tax ID. If you can’t get a Social Security Number, an ITIN (Individual Taxpayer Identification Number) lets you file US taxes and complete tax ID fields for services such as Stripe, PayPal, Amazon and US banks.

Ever asked someone just back from the US about their experience? They’ll talk about how the place affected them, and also about practicalities like tax ID applications and visas. International travelling is fun, but it comes with responsibility: you need to stay up to date with the rules of the country you’re visiting.

Read on to learn why US company formation and a tax ID application matter for non-residents, especially travellers who run successful blogs or sell online on Amazon.

What Is an ITIN?

ITIN stands for Individual Taxpayer Identification Number. It is a nine-digit tax processing number beginning with “9”, issued by the IRS (Internal Revenue Service).

ITINs are used by people who need a US taxpayer identification number for tax purposes but are not able to get a Social Security Number (SSN) from the Social Security Administration.

Who Needs a Tax ID Application?

Ask yourself: are you a US citizen? Do you have a green card? Do you have a Social Security Number, or are you likely to get one? If the answer to these is no, it may be time to apply for an ITIN number so that you can file your taxes in the US.

Those who can apply include:

• Non-residents of the US who don’t have an SSN
• Dependents and spouses of US citizens
• Dependents and spouses of green card holders

Why a Tax ID Is Important for Non-residents in the US

Having a tax ID in place is essential for many purposes. Here are a few important ones:

• Payment and selling platforms: when registering with Stripe, PayPal and Amazon, you can use it in the section that asks for your SSN.
• Filing taxes: as a non-resident, an ITIN lets you file your federal income tax return.
• US banking: US banks require a tax ID for processes such as managing personal or company finances. Without an SSN, an ITIN can be used instead, including when opening a US business bank account remotely.

Frequently Asked Questions

What is the difference between an ITIN and an SSN?

An SSN is issued by the Social Security Administration. An ITIN is issued by the IRS for tax purposes to people who need a US taxpayer number but can’t get an SSN.

Do I need a US company to sell on Amazon as a non-resident?

Many travellers who run blogs or sell online on Amazon form a US company and obtain tax ID numbers to operate smoothly with US platforms and banks.

Can spouses and dependents apply for an ITIN?

Yes. Dependents and spouses of US citizens and green card holders can apply.

Final Words

Travelling or living in a foreign country is a completely different experience that opens the door to plenty of opportunities. But those opportunities only pay off if you understand the prerequisites, such as US company formation and your tax ID application, and handle them on time.