Brokerage account without an SSN: what works with an ITIN or a passport

Step by step

1. 1

   Find out your US tax status

   For US taxes you are a resident alien if you have a green card or pass the substantial presence test: at least 31 days in the US this year and 183 days over 3 years, counting all days this year, 1/3 of last year's days and 1/6 of the year before. Resident aliens fill in Form W-9 at the broker and pay tax like US citizens. Everyone else is a nonresident alien and fills in Form W-8BEN. Days on an F, J, M or Q student visa usually do not count for the first 5 calendar years, so most F-1 students fill in Form W-8BEN; a tax professional can confirm your status.

2. 2

   Living in the US: use your ITIN

   These brokers accept an ITIN in place of an SSN: Webull, Firstrade, Fidelity, Ally Invest and Acorns. All five need you to live in the US. Webull and Firstrade also want US citizenship, a green card or an E-1, E-2, E-3, F-1, H-1B, L-1, O-1 or TN visa; Acorns takes US citizens and other lawful residents 18 or older.

3. 3

   No ITIN yet: how to get one

   The IRS issues an ITIN only when you have a federal tax reason, usually a tax return you must file. You apply for free with Form W-7 attached to the return, and it takes about 7 weeks, or 9-11 weeks from January 15 to April 30. Until then, look at the passport options in the next step.

4. 4

   Only a passport, or living abroad

   If you live outside the US, Interactive Brokers opens an account with the number of an ID document, such as a passport, and Form W-8BEN; people who live in the US give it an SSN. Firstrade has a separate international account for people who live in one of 27 countries, such as Mexico, India, Spain or Poland, and have no SSN or ITIN: you send a passport and Form W-8BEN. Webull does not keep accounts for people who live outside the US.

5. 5

   Fill in Form W-8BEN

   You give it to the broker, not to the IRS. Use your permanent home address abroad, not a P.O. box, and usually your tax number from your home country on line 6a. The form is valid until December 31 of the third year after the year you sign it, and if your situation changes, for example you move to the US, you must tell the broker within 30 days.

6. 6

   Know the tax on your income

   For a nonresident alien, US dividends are taxed at 30%, and the broker withholds it. A tax treaty between your country and the US can lower the rate; you claim it on Form W-8BEN. Interest on US bank deposits is not taxed, and gains from selling stocks are generally not taxed if you were in the US for less than 183 days that year.

7. 7

   Check the broker before you send money

   Look the firm up in FINRA BrokerCheck, a free tool that shows its licenses and disciplinary events. If a SIPC member broker fails, SIPC protects up to $500,000, including up to $250,000 in cash, and you do not need to live in the US or be a citizen. SIPC does not cover a drop in prices: stocks go up and down, and you can lose money.