ITINs are needed for a whole host of people with atypical tax situations. Today we’re focusing on a topic we’ve encountered regularly, non-citizen members of US-based LLCs. Do they need an ITIN?
Hans, a foreign national from central Europe, decides to join his US-based friend, Dustin, in a business venture. To start, Dustin registers an LLC in California and includes himself and Hans as members. However, the business won’t start operating for at least another year as Dustin works to get the business set up.
Does Hans need an ITIN?
Given the circumstances, no. ITINs are needed to meet income tax obligations. ITINs are not needed to register an LLC. The business has not started operating yet, so there will likely be no income to report for the year the business gets registered.
However, if you change the circumstances…….
Dustin registered the LLC in January and managed to get the business going by October. The business deals in rare collectible merchandise and by the end of December they are starting to generate revenue.
In this case, Hans will need to obtain an ITIN as soon as he can so that he can file income taxes related to the business’s income. Incurring US-based income creates a tax obligation that will necessitate an ITIN for foreign members of an LLC.
Obtaining an ITIN simply requires submitting a form, but it isn’t exactly an easy or short process. It may take weeks and requires documents that may not be readily available. Fortunately, Hans and others in need of an ITIN can contact Certified Acceptance Agents (CAAs), such as us here at myITINapp, to help process their ITIN application and cut down the normal processing time of several weeks. Learn more about how we can help you with your ITIN application.
myITINapp Editorial Team
The myITINapp Editorial Team helps make ITIN applications and U.S. tax requirements easier to understand, with straightforward guidance based on trusted sources like the IRS.
