Are you a Resident Alien for tax purposes?

This is some information I found on the IRS website about the Resident Alien status for tax purposes. Depending on these requirements you may be subject US taxation as a resident, even if you are not a Resident Alien according US immigration status (e.g. holder of a US green card or an appropriate work visa).

IRS Information:

Resident Aliens

You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for calendar year 2008 (January 1–December 31). Even if you do not meet either of these tests, you may be able to choose to be treated as a U.S. resident for part of the year. See First-Year Choice under Dual-Status Aliens, later.

Green Card Test

You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2008. (However, see Dual-Status Aliens later.) This is known as the “green card” test. You are a lawful permanent resident of the United States at any time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) (or its predecessor organization) has issued you an alien registration card, also known as a “green card.” You continue to have resident status under this test unless the status is taken away from you or is administratively or judicially determined to have been abandoned.

Resident status taken away. Resident status is considered to have been taken away from you if the U.S. government issues you a final administrative or judicial order of exclusion or deportation. A final judicial order is an order that you may no longer appeal to a higher court of competent jurisdiction.

Resident status abandoned. An administrative or judicial determination of abandonment of resident status may be initiated by you, the USCIS, or a U.S. consular officer. If you initiate the determination, your resident status is considered to be abandoned when you file either of the following with the USCIS or U.S. consular officer.

• Your application for abandonment.

• Your Alien Registration Receipt Card attached to a letter stating your intent to abandon your resident status.

You must file the letter by certified mail, return receipt requested. You must keep a copy of the letter and proof that it was mailed and received. If the USCIS or U.S. consular officer initiates this determination, your resident status will be considered to be abandoned when the final administrative order of abandonment is issued. If you are granted an appeal to a federal court of competent jurisdiction, a final judicial order is required. Under U.S. immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. A long-term resident who ceases to be a lawful permanent resident may be subject to special reporting requirements and tax provisions. See Expatriation Tax in chapter 4.

Termination of residency after June 3, 2004, and before June 17, 2008. If you terminate your residency after June 3, 2004, and before June 17, 2008, you will still be considered a U.S. resident for tax purposes until you notify the Secretary of Homeland Security and file Form 8854, Expatriation Information Statement.

Termination of residency after June 16, 2008. For information on your residency termination date, see Former long-term resident under Expatriation After June 16, 2008, in chapter 4.

Substantial Presence Test

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2008. To meet this test, you must be physically present in the United States on at least:

1. 31 days during 2008, and

2. 183 days during the 3-year period that includes 2008, 2007, and 2006, counting:

   1. All the days you were present in 2008, and

   2. of the days you were present in 2007, and

   3. of the days you were present in 2006.

Banking from Non-Banks - Credit Unions

Everyone knows

• Bank of America,
• CitiBank,
• WellsFargo,
• Chase

or other major bank across the nation.

But there is another kind of bank, which does not call itself Bank but Credit Union.

Credit Unions were founded a long time ago, by companies, cities or other organizations to serve their own employees. Their services were initially limited to those employees or other special interest groups, but have nowadays opened themselves more and more to the general public.

Credit Unions, as not being the big banking giant, are your local bank around the corner. Usually their offers are better than those of the major banks.

More information soon at this place!

Secured Credit Cards vs. Prepaid Cards - What is the difference?

You may have heard about Secured Credit Cards and Prepaid Credit Cards.The concept of both cards seems quite similar, you pay a certain amount of money ahead of your purchases, and then use the cards. But why are there these different types of cards? Is there a difference? Yes there are. These are the details:

• Prepaid Debit Cards - Prepaid debit cards descended from secured credit cards that you are probably heard of. First of all, prepaid debit cards are just simple debit cards, that carry usually the Mastercard or Visa logo, and which are accepted worldwide. Similar to your regular debit card they deplete money in your account by your transactions. There are no monthly payments, as the money is already in the account as it is prepaid, and best of all there is no interest on these cards.
  
  The big difference is what is needed to qualify for such a card, and how much it cost to use it. Prepaid debit cards do not need to qualify for bank credit checks. Issuers usually do not verify employment, credit, or even the addresses and the legal residency. Therefore these cars are very popular among the population of illegal immigrants in the USA.
  
  The drawback of these cards are are much higher fees than traditional secured credit cards. This is the price people have pay for convenience and anonymity. These cards will not report cardholder transactions to the credit bureaus. Therefor you can not build credit with such a card!
  
  In the US is impossible to live without some type of Visa or Mastercard. Debit cards fill this void. They offer a simple "de facto" banking system for those unable to qualify normally. They offer direct deposits for paychecks and many other features to a segment of society that traditional banks have left out in the cold.
  

• Secured Credit Cards – are credit cards that are specifically designed for people with bad credit. Most people that apply for these types of credit cards do so to build or rebuild their credit. The other advantages are they appear, look and act exactly like a regular credit card. Most prepaid cards are clearly marked as debit cards.
  
  The price you pay for rebuilding your credit is interest. The bad thing is that you are paying interest on money you have! Unlike prepaid debit cards, secured cards usually carry pretty steep interest rate, usually around 20%. Secured credit cards are not usually "re-loadable". Meaning, once you make your initial deposit this becomes your "credit limit". Your payments will bring down the balance giving you more purchasing power.
  
  Secured credit cards report to the credit bureaus exactly the same way a regular credit card does. Creditors that review your credit for purchases have no idea if your credit card is secured or not. Another thing to watch is that most people will fund their cards with money that they intend to use immediately. Meaning they send in $500 and expect to be able to go out and spend that $500 immediately on receipt of their card. This is not good borrowing practices and will actually bring down your credit score.
  
  Credit cards are viewed as liabilities on your credit bureau once you borrow over half of your credit limit. The credit bureaus see this as a sign of credit dependency and discount your credit score 35%. When this happens you are hurting your credit, paying regular credit card fees, paying interest on your money and carrying around a maxed out credit card.
  
  Our advice to borrowers is to save up enough money so that your initial deposit is large enough to show a decent credit limit on your credit bureau, around $1000. Then leave it alone. It will only cost you the price of the annual fee to keep it in their bank. Most people feel the need to charge something on the card to "prove" they can pay it back. This assumption could not be further than the truth. Credit bureaus do not show monthly payments; they only show the months you have had the account open and any months that you have been delinquent.
  
  When a future creditor sees your $1000 open line of credit, higher credit scores and the financial restraint you have demonstrated you will be much more likely to get the loan. Secured credit cards can significantly help you rebuild your credit and have a positive impact on you overall credit score. Unfortunately most people use them incorrectly and end up hurting their credit more than it was before getting the card.

Wachovia Secured Credit Card

As a result of the changes in the financial markets, Wachovia was taken over by Wells Fargo Company of San Francisco. Secured credit cards for Wachovia are therefore offered by Wells Fargo.

Secured Visa Credit Card from USBank

This is another secured credit card, for persons that have a bad or not credit history.

It is a secured Visa Credit Card from USBank.

This card is available only in the one of the following states: AR, AZ, CA, CO, IA, ID, IL, IN, KS, KY, MN, MO, MT, ND, NE, NV, OH, OR, SD, TN, UT, WA, WI, WY.

Annual Percentage Rate for Purchases: 20.99% variable
Other Annual Percentage Rates1	Balance Transfers: 20.99% variable Cash Advances:20.99% variable Delinquency Rate: 28.99% variable
Variable Rate Information	Your annual percentage rate may vary monthly. The rate is determined by adding a margin to the Prime Rate. The margin used is as follows: Purchases and Balance Transfers: 16.99% Cash Advances: 16.99% Delinquency Rate: 23.99%
Grace Period	20 - 25 days for purchases only
Method of Computing the Balance for Purchases	Average Daily Balance Method (Including new purchases).
Annual Membership/Program Fee	$35.00
Minimum or Fixed Finance Charge	$2.00 minimum finance charge when interest is due, $0.00 closed Account management fee if you voluntarily close your Account with a balance.
Other Fees	Balance Transfer Fee:v3.00% of the transaction amount, $5.00 minimum Cash Advance Fee:v4.00% of the transaction amount, $10.00 minimum Cash Equivalent Fee:4.00% of the transaction amount, $20.00 minimum Late Payment Fee:vBalance up to $100.0: $19.00 Balance from $100.00 up to $250.0: $29.00 Balance of $250.00 or more: $39.00 Overlimit Fee : $39.00 Convenience Check Advance Fee: 3.00% of the transaction amount, $5.00 minimum Overdraft Protection Advance Fee: $10.00 per occurrence Foreign Transaction Fee: Less than or equal to 3% of the amount of your transaction in U.S. Dollars.

All interest rates are minimum interest. Information valid as of today and subject to any change anytime!!!

How to apply?

1. Complete an application.
2. Print and sign the U.S. Bank Secured Visa® Credit Card application.
3. Prepare a check for $300 to $5,000 made payable to U.S. Bank National Association. The check MUST BE a certified check, money order, or cashier's check.
4. Mail your application along with your check to :

U.S. Bank National Association ND
P.O. Box 6363
Fargo, ND 58125-6363

Good luck!

Individual Taxpayer Identification Number (ITIN): Some facts about it and how to apply for one

What is an ITIN?

• An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. It is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX.
• IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).
• ITINs are issued regardless of immigration status because both resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code.
• Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.

What is an ITIN used for?

• ITINs are for federal tax reporting only, and are not intended to serve any other purpose. An ITIN does not authorize work in the U.S. or provide eligibility for Social Security benefits or the Earned Income Tax Credit. ITINs are not valid identification outside the tax system.
• IRS issues ITINs to help individuals comply with the U.S. tax laws, and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers.

Who needs an ITIN?

• IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for a SSN, who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty, needs an ITIN.
• Examples of individuals who need ITINs include:

1. Non-resident alien filing a U.S. tax return and not eligible for a SSN
2. U.S. resident alien (based on days present in the United States) filing a U.S. tax return and not eligible for a SSN
3. Dependent or spouse of a U.S. citizen/resident alien
4. Dependent or spouse of a non-resident alien visa holder

Are ITINs valid for identification?

• No. ITINs are not valid identification outside the tax system. Since ITINs are strictly for tax processing, IRS does not apply the same standards as agencies that provide genuine identity certification.
• ITIN applicants are not required to apply in person, and IRS does not further validate the authenticity of identity documents. ITINs do not prove identity outside the Federal tax system, and should not be offered or accepted as identification for non-tax purposes.

Are ITINs valid for work purposes?

• No. ITINs are for federal income tax purposes only. Getting an ITIN does not change your immigration status or your right to work in the United States.

REVISED APPLICATION STANDARDS FOR ITINS

What are the revised application standards for ITINs?
Effective immediately, each ITIN applicant must now:

• Apply using the revised Form W-7
  
• Attach a federal income tax return (Form 1040NR) to the Form W-7. Any applicants who meet an exception to the requirement to file a tax return (see the instructions for Form W-7) must provide documentation to support the exception.

Why is IRS revising the ITIN application process?

• The revisions to the ITIN application process will help ensure ITINs are used for their intended tax administration purposes.

What documents are acceptable as proof of identity and foreign status?

• IRS has streamlined the number of documents the agency will accept as proof of identity to obtain an ITIN. There are now 13 acceptable documents.

• An original, or a certified or notarized copy, of an UNEXPIRED passport is the only document that is accepted for both identity and foreign status. If you do not have a passport, you must provide a combination of current documents that contain expiration dates - we accept documents issued within 12 months of the application if no expiration date is normally available. The documents must also show your name and photograph, and support your claim of foreign status.

• IRS will accept certified or notarized copies of a combination (two or more) of the following documents, in lieu of a passport:

1. National identification card (must show photo, name, current address, date of birth, and expiration date)
2. U.S. driver's license
3. Civil birth certificate (required for dependents under 18 years old)
4. Foreign driver's license
5. U.S. state identification card
6. Foreign voter's registration card
7. U.S. military identification card
8. Foreign military identification card
9. Visa
10. U.S. Citizenship and Immigration Services (USCIS) photo identification
11. Medical records (dependents - under 14 years old only)
12. School records (dependents and/or students - under 18 years old - only)

HELP AND INFORMATION

How do I apply for an ITIN?

• Use the latest revision of Form W-7, Application for IRS Individual Taxpayer Identification Number to apply. Attach a valid federal income tax return unless you qualify for an exception, and include your original or certified proof of identity documents. Because you are filing your tax return as an attachment to your ITIN application, you should not mail your return to the address listed in the Form 1040, 1040A or 1040EZ instructions. Instead, send your return, Form W-7 and proof of identity documents to:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

• You may also apply using the services of an IRS-authorized Acceptance or visit an IRS Taxpayer Assistance Center in lieu of mailing your information to the IRS in Austin. TACs in the United States provide in-person help with ITIN applications on a walk-in or appointment basis. Applicants outside the United States should contact an overseas IRS office to find out if that office accepts Form W-7 applications. The IRS's ITIN Unit in Austin issues all numbers by mail.

When should I apply for an ITIN?

• You should complete Form W-7 as soon as you are ready to file your federal income tax return, since you need to attach the return to your application.
• If you meet one of the exceptions and do not need to file a return, submit Form W-7, along with the documents required to meet your purpose for needing an ITIN, as soon as possible after you determine that you are covered by that exception.
• You can apply for an ITIN any time during the year; however, if the tax return you attach to Form W-7 is filed after the return's due date, you may owe interest and/or penalties. You should file your current year return by the April 15 deadline to avoid this.

How and when can I expect to receive my ITIN?

• If you qualify for an ITIN and your application is complete, you will receive a letter from the IRS assigning your tax identification number, usually within four to six weeks. The IRS has changed from an ITIN card to an authorization letter to avoid any possible similarities with a Social Security Number card. Current ITIN holders' cards will not be replaced; they should continue to use the numbers previously issued when they need to supply identifying numbers for tax purposes.
• If you have not received your ITIN or other correspondence six weeks after applying, you may call the IRS to find out the status of your application.

Where can I get help with my ITIN application?

• You may call the IRS toll-free at 1-800-829-1040 for information and help in completing your Form W-7 and your tax return, or to check on the status of your application six weeks after submitting Form W-7.

• Assistance is also available by appointment at IRS Taxpayer Assistance Centers (TACs) in the United States to provide in-person help with ITIN applications on a walk-in or appointment basis. Applicants outside the United States may contact an overseas IRS office to find out if that office accepts Form W-7 applications.

• You may also use the services of an IRS-authorized Acceptance Agent.

What is an Acceptance Agent?

• An Acceptance Agent is an individual, business or organization (college, financial institution, accounting firm, etc.) authorized by IRS to assist individuals in obtaining ITINs. Certifying Acceptance Agents review applicants' documentation, complete a certificate of accuracy, and forward the certificate and application to the IRS for processing. Some Acceptance Agents may charge a fee.

Information up to this point is provided by the US Internal Revenue Service.


The best at last:
Are there any fees associated with the ITIN imposed by the IRS?

• No! The ITIN is issued as part of a regular tax filing. There is no special fee imposed by the IRS to the taxpayer.
• Therefore no one should consider any websites offering IRS forms (e.g. W-7) at absurdly high prices of up to $50! Just be aware, that such forms can be easily downloaded from the IRS website.

Real Experience with the ITIN Application Process

The application process is not that complicated, but the rules must be fulfilled by the requestor. Trying to get around this, should not be considered and may eventually have serious consequences when dealing with the IRS.

• ID checking is strict - no discussion possible!
  

After the initial years of the ITIN processing, which came with rather not so perfect ID checking, IRS has not increased the diligence of its ID document checking. Document requirements must be met! IRS processes mainly two types of applications.

1. A large number of applications are from illegal aliens present in the USA. Those applicants usually use the services of local acceptance agents, who do the checking.
2. Other applications, who are not from illegal aliens in the USA, rely on the direct processing of the IRS, with their ID document checking procedures. As you belong to this group of people, be aware that you will be screened much more as you may not use any local acceptance agent.
   

• present information orderly and clean

In the course of the application it is highly adviable to present all documents in "good shape". Forms should be filled out readable and properly. IRS staff is willing to do a good job, therefore help the IRS person who will process your application! Otherwise longer processing times will happen, and you will have to send a lot of additional mails to them. If possible do not use any handwriting, as this may not be understood at all times. Rather print information with your computer, use the PDF forms that can be filled electronicly and nicely printed.

• be friendly to IRS people, because they are also very friendly to you

Experience shows that most IRS staff is nice and friendly. Some may be a little grumpy, but they know that any new ITIN application may eventually get them additional tax revenues. If you deal with IRS staff on the phone, do no tbe surprised, but they are much more friendly than what your experience is from a local cable company or maybe an airline. Friendliness pays and will expedite the processing of your application! In your letters to IRS you may also give a little person touch by adding "Thank You", this time handwritten, at the end of your letters. It will create a much nicer personal atmosphere that will be highly beneficial for your wish. These simple but efficient rules also apply to other agencies and sometimes even private companies ... :-)

Wamu (Chase) Online Savings Account with ITIN (Individual Taxpayer Identificatoin Number)?

Wamu Statement Savings Account

Wamu currently offers an almost 0% interest statement savings account, which can be opened at one of the Wamu branches. "Almost 0%" means here 0.01% per year, not per day, not per month. Ouch!

Investing $1.000 in such an account would give you the exceptionally high amount of around 10 cents or $0.10! Not a really an attractive investment, even today.

Wamu Online Savings Account

The Online version of the Wamu Savings Account offer you around 75 times the interest of the Wamu Savings Account, which means 0.75% per year.

Therefore such an account would be a much better, as an investment of $1.000 would give you at least $ 7.50 per year.

Catch: Online Application

The only problem is that the Wamu Online Savings Account can only be opened online providing a SSN and a US identification document number and validity date. There is no alternative option to get this account!

Therefore it is virtually impossible to get this account as an NRA (non resident alien) or a US person without a SSN.

News:
Wamu now mentions now on its website, that it also accepts a "taxpayer ID number".

Taxpayer ID could mean SSN, ITIN or EIN. But there is no clarification given.

The Wamu help pages do not provide any information either, if "taxpayer ID number" is entered. Therefore it is not clearly stated, if an ITIN (Individual Taxpayer Identification Number) could be used. But give it a try!