ArticleThe end of 2024 is quickly approaching, and many are taking a moment (or two) to enjoy the Holiday Season. But as is always the case, after the New Year, taxpayers must turn their attention to tax filing season.
In an effort to streamline tax compliance by making it easier and more accessible to all, the Internal Revenue Service has added (and updated existing) digital tools which can be found here. Among these are an interactive tax assistant aimed at answering basic tax questions, and providing a navigable list of topics full of frequently asked questions. The IRS also provides free, online, guided tax preparation software (for those who qualify), and allows taxpayers to track amended returns and refunds online.
In addition to making these digital tools available, the IRS encourages taxpayers to be proactive in their preparation for the upcoming filing season, and lists various steps to take in order make filing easier. For example, aside from providing advice on safe and comprehensive recordkeeping, the IRS also suggests creating an online account, reflecting on any life changes that might impact filing status (e.g., marriage/divorce, welcoming a child, purchasing a home, etc.), and reviewing one’s paycheck withholding.
In generalized discussions about tax filing, we tend to focus on U.S. taxpayers; but in our practice we often encounter issues affecting foreign taxpayers, as well. One of the IRS’s suggestions to foreign taxpayers is to renew (if necessary) their individual taxpayer identification number (“ITIN”). The need to renew one’s ITIN generally concerns foreign taxpayers who are required to file a U.S. tax return, including for purposes of claiming a refund (e.g., with respect to over-withholding on the sale of U.S. real estate). While an individual may renew his/her ITIN when filing a tax return, the process requires several additional steps and forms. The IRS provides a helpful FAQ, here.
In our practice, we have seen firsthand how an incorrect attempt at renewal (or no renewal at all) leads to significant delays and/or denials of valuable tax credits, exemptions, etc. Accordingly, in advance of the upcoming filing season, foreign taxpayers are encouraged to contact experienced professionals to ensure proper ITIN renewal, and general adherence to U.S. tax reporting and compliance requirements.
