Initial Setup and Registration with the Tax Authorities
While all US residents are identified by their social security number (SSN), NRA need to obtain an Individual Tax Identification Number (ITIN) from the Inland Revenue Service (IRS). Obtaining an ITIN will allow to avoid susbtantial withholding tax on rental income and withholding on sales proceeds.
The ITIN can be obtained using a W7 form, which is filled using these instructions.
The IRS charges nothing to give an ITIN to a NRA. Some people will ask $75$ to $100 to fill it, I'd rather tell you how to do it for free. You can print the form yourself, fill it with your personal details and send it so you know what you sent and when it was posted, and you'll receive the IRS answer.
- if you are in a country with tax treaty, you can file the W7 with case a
- if there is no tax treaty, you can file the W7 case b with his tax filing the year after he bought the house. So he got his ITIN later and could not get mortgage..
- as I wanted to get a mortgage in US, I could not wait for one year, I filed the W7 case h: mortgage for property investment, I enclosed a letter from a mortgage provider that said I need an ITIN to get a mortgage.