How Do You File Taxes with an Individual Taxpayer Identification Number (ITIN)?

What Is IRS Free File?

The IRS Free File Program is a public-private partnership between the IRS and many tax preparation and filing software industry companies who provide their online tax preparation and filing for free. It provides two ways for taxpayers to prepare and file their federal income tax online for free:

  • Guided Tax Preparation provides free online tax preparation and filing at an IRS partner site. Our partners deliver this service at no cost to qualifying taxpayers. Taxpayers whose AGI is $73,000 or less qualify for a free federal tax return.
  • Free File Fillable Forms are electronic federal tax forms, equivalent to a paper 1040 form. You should know how to prepare your own tax return using form instructions and IRS publications if needed. It provides a free option to taxpayers whose income (AGI) is greater than $73,000.

Find what you need to get started, your protections and security, available forms and more about IRS Free File below.

 

1. Ask the IRS

Call the IRS directly at (800) 829-1040, or go in person to an IRS Taxpayer Assistance Center.

But beware. The IRS doesn’t readily answer tax law questions about your situation. Phone lines will usually divert taxpayers to IRS.gov for answers.

Also, getting through to speak with an IRS representative isn’t always easy because of long wait times. If you’re successful, the IRS representative can provide you with information about your status.

Start with one simple question about your overall status: “Can you do a compliance check on my account to see if there are any outstanding issues?”

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When is the tax deadline if you get an extension?

Tax deadlines are confusing this year. Tax Day was pushed to May 17 from its usual April 15. While that meant taxpayers also had until May 17 to make 2020 contributions to individual retirement accounts (IRAs), Roth IRAs and health savings accounts (HSAs), quarterly filers still owed payments on April 15.

Despite the confusion, a deadline that hasn’t changed is the date by which you have to file your taxes if you get an extension: October 15. So if you file for an extension, you still need to get your taxes done by that date (again, that doesn’t mean you have until then to pay your taxes).

What does a tax preparer need to prepare tax returns?

Tax preparers need to efficiently and securely access and manage confidential information for their clients. As a result, most preparers look for software to manage their workflow effectively and efficiently.

Tax software should help preparers in the following ways:

  • Learn. You can’t know everything. There will always be knowledge gaps and questions from clients that you didn’t anticipate. Professional tax software should increase your know-how, the ability to fill knowledge gaps with trusted and meaningful information for your daily work. Something to “unstuck you” when you don’t know how to proceed.
  • Research. Every client is different. And that means every answer you provide will need to be tailored to their specific questions and concerns. A tax research software solution can help get the answers when you need to go deeper and retrieve more information. 
  • Operate. Tax preparation requires a significant amount of day-to-day organization. You need tools to do the work and produce all the necessary forms. From document management solutions to e-filing assistance, tax software should make your operational duties easier, more productive, to do your job with confidence every time.

2. Credit for Other Dependents (OCD)

A $500 non-refundable credit is available for families with qualifying relatives. This includes children over 17 and children with an ITIN  who otherwise qualify for the CTC. Additionally, qualifying relatives who are considered a dependent for tax purposes (like dependent parents), can be claimed for this credit. Since this credit is non-refundable, it can only help reduce taxes owed. If you are eligible for both this credit and the CTC, this will be applied first to lower your taxable income.

3. Research your IRS online account for tax information

In your online IRS account, you can view tax bills, see payments you’ve made in the past 18 months, and download your transcripts. If your transcripts show any unusual activity, you’ll have to contact the IRS to learn more.

Tip: The IRS uses a complex set of authentication measures to verify your identity and allow you to set up an online account. Many taxpayers have trouble making it through that process. If you have trouble logging in, you’ll need to call the IRS or get a tax pro to help.

Learn how to research your tax account or outsource it to a tax pro.

So, can you tell me how to get an EFIN?

It’s a 3-step process. Here’s the process to obtain an EFIN:

1.      Create an IRS e-Services account on the IRS website.

2.      Complete and submit your application to become an authorized IRS e-file provider. It can take up to 45 days for the IRS to approve an e-file application, so plan accordingly. All applicants must provide the following:

  • Identification information for your firm
  •  Information about each Principal and Responsible Official in your organization
  • Your e-file provider option (if you are a return preparer and want to e-file on behalf of clients, select Electronic Return Originator, or ERO)

If the Principal or Responsible Official is a certified or licensed professional, such as an attorney, CPA, or enrolled agent, they must provide their current professional status information.

All other applicants must provide a fingerprint card, which can be arranged by calling the IRS toll-free at 866-255-0654. If you need to be fingerprinted, work with a trained professional. There are commercial services, but your local police station will likely provide this service for a modest fee. Then mail the signed and completed card to the IRS.

3.      Pass a suitability check. After you submit your application and related documents, the IRS will conduct a suitability check on the firm and each person listed on your application as either a Principal or Responsible Official. This may include: a credit check; a tax compliance check; a criminal background check; and a check for prior non-compliance with IRS e-file requirements. Once approved, you will receive an acceptance letter from the IRS with your EFIN.

There’s No Time Limit on the Collection of Taxes

If you have old, unfiled tax returns, it may be tempting to believe that the IRS or state tax agency has forgotten about you. However, you may still be on the hook 10 or 20 years later.

There is generally a 10-year time limit on collecting taxes, penalties, and interest for each year you did not file. However, if you do not file taxes, the period of limitations on collections does not begin to run until the IRS makes a deficiency assessment.

State tax agencies have their own rule and many have more time to collect. For example, California can collect state taxes up to 20 years after the assessment date.

Negotiate Your Tax Bill

If your tax assessment is too high, you may be able to negotiate a better deal. Penalties may represent 25% of what you owe to the IRS. Getting these removed can make a real difference. File Form 843 to request an abatement of taxes, interest, penalties, fees, and additions to tax.

You might consider a Partial Payment Installment Agreement (PPIC) where the IRS agrees to accept less than the total you owe. The IRS will only agree to a PPIC if it’s clear that the monthly payments you can make will not cover your total taxes due for many years.

Another option to reduce your total tax liability is an offer in compromise (OIC). If the IRS accepts an OIC, it acts as an agreement between a taxpayer and the IRS to settle a taxpayer’s tax liabilities for less than the full amount owed. If you can fully pay your liability through an installment agreement or other means, you won’t generally qualify for an OIC.

Where to file your taxes

Now you know that doing your taxes boils down to adding up your income and deductions and hoping the latter will overweigh the former so that the government pays you (and not the other way around). It’s time to file—this year, you have till May 17. If you’re a Texas resident, you’ll have until June 15.

But what exactly is the process of filing your taxes? There are a few options.

Filing online

One of the most popular ways to do your taxes is to file online. With services like TurboTax and H&R Block, you can file for free if your tax situation is simple or pay for one of the premium packages to get access to extra features and help from tax specialists. You can also check free e-file options from the IRS.

Using these tools is comparatively easy. They guide the process by asking you simple questions and filling out your state and federal returns for you. You can even take pictures of your forms and upload them to have your info entered automatically.

Once you’re done, the tool will calculate the maximum possible refund and file your taxes for you. See, it’s not that scary!

Filing with a tax pro

For the last couple of years, my taxes have been more complicated than I’d like them to be. I moved states, switched jobs, changed my filing status, didn’t receive my first stimulus check and so on.

I took a stab at filing online for free but ended up with many questions and a migraine. So, I just let someone who knows what they’re doing handle it for me; I made an appointment with a tax professional.

There’s nothing wrong with having a specialist do your taxes if your tax situation is a bit more complex. Of course, you’ll have to pay a fee, which varies by the tax preparer and complexity of your taxes. It can be a certified public accountant, attorney or enrolled agent—just make sure the person is qualified by checking their credentials. Many people (myself included) also use H&R Block for filing with a tax professional.

Prices typically range between $100 and $300. If you’re looking for an affordable option, look into your local credit unions which may offer low-cost tax preparation services.

If you’re still a student, there’s another great option for you.

“Many college and university campuses will provide tax preparation services for students with the assistance of other students who may be looking to gain experience working under a qualified supervisor in a tax lab,” says Jeffrey Wood, CPA and partner at Lift Financial. “These labs are usually located in the business departments, may be free depending on your institution, and may be worth looking into for tax filing assistance.”

Filing your taxes by hand

I’ve never met anyone who’s still doing their taxes manually, especially when it’s their first time. You’d have to fill out Form 1040 or Form 1040-SR by hand and use a calculator to add up all your income and deductions. Then you’d have to mail the form and wait for six to eight weeks for the IRS to process your return.

To be completely honest, I don’t see a reason for anyone to choose this route. When there are services that allow you to file online for free, why would you go so old-school?

Filing a Simple Return

There are two main reasons you may want to file a simple return in 2022:

  1. To claim the 2021 Recovery Rebate Credit (Economic Impact Payment or “EIP”)If you didn’t receive the latest EIP, you could be eligible to receive the following as part of your tax refund:
    • $1,400 for a single individual
    • $2,800 for a married couple filing jointly
  2. To claim the 2021 Child Tax Credit (CTC)If you are eligible for this credit, the maximum amount you could receive is:
    • $3600 for each child ages 0 to 5
    • $3000 for each child ages 6 to 17

To claim any recovery rebate or child tax credits that you are eligible for, you can file a simple return online by going to . This online resource is both mobile friendly and available in Spanish.

The best guarantees in the business

When life and taxes change, your refund could, too. File with a Tax Pro and be 100% certain you’re getting every dollar you deserve.

Access your tax refund quickly and safely

If you think you may receive a refund, here are some things to think about before you file your return:

  • If you already have an account with a bank or credit union, make sure you have your information ready — including the account number and routing number — when you file your tax return. You can provide that information on the tax form and the IRS will automatically deposit the funds into your account.
  • If you have a prepaid card that accepts direct deposit, you can also receive your refund on the card. Check with your prepaid card provider to get the routing and account number assigned to the card before you file your return.

You can learn more about choosing the right prepaid card here

  • If you don’t have a bank account or prepaid card, consider opening an account. Many banks and credit unions offer accounts with low (or no) monthly maintenance fees when you have direct deposit or maintain a minimum balance. These accounts may limit the types of fees you can incur and may also offer free access to in-network automated teller machines (ATMs). You can often open these accounts easily online.

Learn more about the FDIC’s #GetBanked campaign.

4. Child and Dependent Care Credit (CDCTC)

The Child and Dependent Care Credit is a federal tax benefit that can help you pay expenses for child or adult care that is needed to work or to look for work. The 2021 American Rescue Plan temporarily expands the credit for tax year 2021 (which you file taxes for in 2022), making it fully refundable. This means the credit can provide money back even if you don’t owe taxes. It is worth up to $4,000 for one dependent or up to $8,000 for two or more dependents. Learn more here.

Dont stress about the IRS

Taxes are never fun and can lead to a bad headache. Still, don’t let them scare you, even if you’re filing for the first time. Use a reliable tax service or contact a tax professional if you could use some help—just make sure to check their credentials. You can do it, and welcome to the wonderland of adulthood!

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