A US Corporation is an entity that has its own legal status and must file its own tax return annually. There are two types of US Corporations: - S Corporations (all owners / shareholders with more than 25% ownership must be US citizens) - C Corporations (owners / shareholders can be any nationality) Corporations must appoint three officers: President, Treasurer and Secretary. The officers can issue shares to denote a portion of ownership.

A LLC is a Limited Liability Company. As per the title, the entity operates like a company but limits the level of liability for the owners (members). From a tax perspective an LLC can elect to be taxed as one of the following: - a disregarded entity -a partnership - a corporation An LLC can be established in any of the 50 US states and ‘domesticate’ into any other state as needed. Gingerbread Tax generally recommends either Wyoming or Delaware for LLCs and Delaware for C-Corporation establishment.

This varies between US States. Each Secretary of State has their own establishment fees and reporting requirements. Costs for establishing an LLC can range between $500-$1,500. Gingerbread set up LLCs in several states starting from $500. Apply for an LLC

LLCs require an in-state registered agent to be appointed to receive any entity related correspondence. Registered Agents provide this service for fee per entity. Registered agents are a legally appointed entity who contact you in the event of state based action related to your LLC.

Most LLCs can be applied for online. The time taken to establish an LLC is usually between 48-72 hours. When establishing an LLC you will receive Articles or Organization and an Operating Agreement.

As in Australia, there are ongoing costs for maintaining an LLC. This involves submitting an annual report, updating contact details for the officers or organizers, and paying an annual fee. This usually needs to be done via US credit card or check. The annual costs vary by state and the volume of in-state business conducted. Gingerbread Tax can help you Renew Your LLC

An Individual Tax Identification Number is a number issued to non-US citizens who have a requirement or will have a future requirement to lodge a tax return with the IRS. It operates like a Social Security Number (SSN) but without the social security benefits of an SSN. Australians can think of an ITIN as the US equivalent of a Tax File Number.

You will need an ITIN in order to lodge your first tax return. Most people (90%) apply for their ITIN at the same time they lodge their first tax return. In a limited number of cases, you can apply before you submit a tax return. These applications are called ‘exceptions’ (Publication 1915) and require accurate support documentation to be included with the ITIN application. Common exceptions are: Passive Income 1a - Partnership Income 1d - Investment Income Disposal of US Real Estate

Once you have an ITIN, you can file taxes, open up a US bank account, register for online payment solutions, provide it to 3rd party suppliers and business partners for their reporting requirements, and register for a host of verified services like postal forwarding and legal services.

Once assigned, your ITIN will never be reassigned to another person. It is yours forever. However, if you don’t use your ITIN on a federal tax return for 3 years in a row, it will expire and must be renewed. On, August 17, 2020 the IRS issued a News Release encouraging early renewal. Effective January 1, 2022, all ITIN renewals must be submitted with a new tax return. All expired ITINs remain eligible for renewal as long as the taxpayer will need to file a tax return. ​ More FAQs on ITIN Renewals

To get an ITIN, you need to mail a completed w7 form along with authenticated ID documents to the ITIN Processing Centre in Austin Texas. Your ID documents must be authenticated by the IRS or a Certified Acceptance Agent Authentication requires inspection of the ID documents and a face to face or video interview.. As the ITIN is considered a ‘breeder’ number for other forms of US ID such as bank accounts, drivers licenses, etc, scanned and email applications of ID not accepted when applying for an ITIN..

If you are a US citizen or resident with an existing SSN, you can get an ITIN assigned for dependents whom you can claim on your tax return (e..g spouse or children). As a result of the Tax Cuts and Jobs Act of 2017, the deduction for personal exemptions was suspended for tax years 2018 through 2025. Therefore, spouses and dependents who could’ve been claimed in previous years for the personal exemption and no other benefit shouldn’t apply for or renew their ITINs, unless they qualify for an allowable tax benefit, such as dependent parents who qualify the primary taxpayer to claim Head of Household (HOH) filing status, or if they file their own tax return. The individual must be listed on an attached U.S. federal tax return with the schedule or form that applies to the allowable tax benefit. Limitations of benefits for ITIN holders apply.

The ITIN process involves several background checks and is a manual process. Generally the IRS takes 7-10 weeks to process an ITIN excluding postage time. ITIN applications that are submitted with a tax return are generally processed more quickly than ‘exception applications’ which are processed without an accompanying tax return. After 7 weeks, Gingerbread Tax is able to call the exclusive ITIN Agent phone number to enquire whether your ITIN has been assigned. Once assigned, we will notify you via email of the number. Also, once assigned, the IRS will issued a notification letter (called CP565). With COVID restrictions, the US Postal Service delivery of letters to Australia is taking along time. Here is an example of a CP565 letter.

You need to have a valid reason to apply for an ITIN, a completed w7 form and valid ID that is authenticated by a Certified Acceptance Agent. Valid forms of ID generally are a current passport or a combination of a driver’s license and birth certificate. An ITIN application MUST be submitted with supported evidence, or else it will be rejected. In 90% of cases that supporting evidence is your personal US tax return. The 10% of cases where applications are not submitted with a tax return are called Exceptions. Exception applications must include a different type of supporting document. The full list of exceptions can be viewed in IRS Publication 1915. The two most of common types of exceptions are: (1a) You are part of a US LLC. In this case the supporting evidence is the US LLC EIN. (1d) You are receiving a distribution from a US Company . In this case you need a letter from the company. An sample of the letter format is below:

Gingerbread Tax charges from USD$295 to secure an ITIN for clients. This includes completing the w7 form, authenticating the ID, lodging the application and securing the assigned ITIN. Similar rates are charged by agents in the US, but our Australian location means your passport does not need to be mailed overseas. Apply for an ITIN

Individuals or entities from foreign nations are permitted to open bank accounts in the US. The US Patriot Act requires US based banks to verify the ID of the individual or entity prior to opening an account. Most banks have created their own internal policies which require clients to physically come into a branch so a bank manager can verify them. Most US banks do not have branches in Australia. So, this requirement is problematic to Australians unless they are traveling to the US. Citibank Australia will open a multi-currency account for clients who maintain a deposit of greater than $100,000. Keep in mind, this is not a US bank account as Citibank Australia and Citibank US are separate entities. HSBC have a similar offering.

If you are visiting the US and want to open a US bank account you can do so if you have an ITIN. The types of documents you will need are: Photo and address ID: Examples could be a passport and foreign drivers license Personal Account: ITIN Number: CP565 letter for a personal bank account Business Account: Business Articles (formation document), Operating Agreement showing you have the authority to act for the business, the EIN for the business (IRS letter or fax). They may also request ITINs for all members/shareholders who have 25%+ share of the business. If you don't have that, some banks may open the business account on a provisional basis provided you supply the ITINs for the owners within a specified time in the future. The main reasons why a bricks and mortar account could be useful is if you need to build a new US credit rating or if you require access to a paper check book. However, even apart from the monthly account keeping fees, there are other downsides to US bank accounts. Many will require you to have a standard US phone number (not VOIP) in order to receive 2FA sms codes in order to process transfers and transactions. Unless you have a US mobile phone number in Australia, you may not be able to conduct many transactions on their online bank system. Additionally, many smaller banks use geo-blocking services for their online bank systems, rendering them useless in Australia. For these reasons, we recommend you consider a digital money account through Wise or Mercury Bank.

In recent years, many online payment and broker services have emerged which operate like banks, but don’t have physical branches. These online sites / accounts often include a unique US bank routing and account number and can be set-up online almost instantly. When setting up a business account they will generally require an EIN and also an ITIN after a probationary period. Wise Mercury Bank