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FinanceChauffeur

Building financial footing as a newcomer to the USLesson 3 of 46 min readBy Finance ChauffeurLast reviewed

Taxes and IDs for newcomers

SSN versus ITIN, how to apply for an ITIN with Form W-7, the test that decides your tax residency, and why your first US refund is your own money.

Stop 7 of 11 on the path New to the US · next: How income tax works (and what W-2 vs 1099 means)

US taxes confuse Americans who grew up with them, so if your first W-4 form looks like a puzzle, that is the form's fault. Three things carry you through the first year: knowing which ID number you need, knowing whether the IRS counts you as a resident, and understanding that the money taken from each paycheck is an estimate you settle up in April.

SSN vs. ITIN

Two nine-digit numbers, constantly confused. If you are authorized to work, you apply for a Social Security number at a Social Security office (Form SS-5, free). If you have a US tax obligation but are not eligible for an SSN — a spouse or dependent on some visas, an investor, a family member who is not authorized to work — you apply for an ITIN.

SSNITIN
Issued bySocial Security AdministrationIRS
Who gets oneCitizens and people authorized to workAnyone with a federal tax purpose who cannot get an SSN
Says anything about immigration status?NoNo
Work authorization?Comes with it, for those eligibleNever
Used forWages, benefits, credit files, taxesTax returns; accepted by many banks and some card issuers

How to get an ITIN: file Form W-7 together with the tax return that needs it, either by mail, in person at an IRS Taxpayer Assistance Center, or through a Certifying Acceptance Agent who verifies your passport so you do not have to mail it. The IRS says to allow about 7 weeks, or 9 to 11 weeks during tax season or from overseas. ITINs expire if you stop using them, so file with it each year you are required to.

Resident or nonresident — for tax purposes only

Tax residency is a separate test from immigration status. Under the IRS substantial presence test, you are a resident for the year if you were in the US at least 31 days this year and at least 183 days counting all of this year's days, one-third of last year's, and one-sixth of the year before. Green-card holders are residents from day one. Some visa holders — F-1 and J-1 students and scholars during their exempt years, for example — do not count days for a period and stay nonresidents; they also skip FICA taxes while nonresident. IRS Publication 519 has the full test.

If you are a…You fileYou are taxed onStandard deduction?
Resident for tax purposesForm 1040Worldwide incomeYes — $15,750 for a single filer for 2025
NonresidentForm 1040-NRUS-source incomeGenerally no, unless a tax treaty allows it

Tax treaties between the US and about 60 countries can exempt certain income — student stipends, teaching pay, a first-years threshold — from US tax or prevent it being taxed twice. Whether one applies to you depends on your country and visa; the IRS treaty tables and a preparer who handles nonresident returns will tell you.

Withholding, the W-4, and the refund

Your employer takes an estimate of your income tax out of every paycheck — withholding — based on the W-4 form you fill in when you start. In April you file a return that compares the year's withholding with the tax you owed. Withheld too much and you get a refund; too little and you pay the difference by April 15. The taxes-101 lesson on withholding shows how to tune the W-4; how income tax works covers the brackets.

Filing without paying a preparer

If your income is $69,000 or less, the IRS VITA program prepares and e-files your return free at community sites; find one with the VITA locator or call 800-906-9887. Many VITA sites have preparers trained in ITIN applications and nonresident returns. Above that income, IRS Free File offers guided software, and a paid preparer who advertises "1040-NR" or "ITIN" experience is the right kind if your situation involves a treaty. Keep every pay stub, W-2 and prior return in one folder; each year gets easier, and a clean filing history is something an immigration application may one day ask to see.

Check your understanding

0 of 4 answered

Pick an answer to check it — you’ll see right away whether you got it, plus a quick explanation.

1.What does an ITIN allow you to do?
2.Under the substantial presence test, what makes you a US resident for tax purposes?
3.Amara earned $36,000 over nine months and had $2,724 withheld. Her 2025 tax as a single resident is $2,191.50. What happens in April?
4.Where can you get a tax return prepared free if your income is $69,000 or less?

Answer all 4 questions to see your score.

Where this comes from

The figures in this lesson are drawn from these official pages. Check them for the current year's numbers — they change, and the page is always more up to date than any summary of it.

Keep the momentum — these connect to what you just read.