By now you should have received from your employer your Form W-2. If you haven't received it, call, because by law it has to be sent to you by January 31. If you work for a local company in Bermuda, you will not receive a Form W-2. However, it is a good idea to have your local employer furnish you with a letter itemising the types and amount of compensation you received. This need not be sent to the IRS, but can be used if the IRS ever questions the amount of income you reported. Remember to include your employers' contribution to your local pension plan, if you are vested in the plan. As the local plan is not a "qualified plan'' per the Internal Revenue Code, all contributions to the plan must be included in income, and if the IRS wants to really bust you, so is the income attributable to the contribution. With proper planning, there are ways to avoid having to pick this amount up in income.

Aside from your compensation, you should also have received Form 1099 from your US bank, broker, etc. You should also go through your check book to ascertain the amount given to charity in 1997. However, remember that contributions to most Bermuda churches and charities are probably not deductible. Unless you are keeping your home in the US, you will probably not itemise deductions and instead use the standard deduction (married-$6,900, single-$4,150).

Be especially careful in reviewing the trade and settlement dates on sales of stock. In 1997, we now have short term, medium term and long term capital gains with different holding periods and tax rates for each. Make your tax accountants life easier and sort this out to both avoid errors and to insure that you pay the minimum tax necessary.

Tax Identification Numbers The Internal Revenue Service (IRS) has announced that it will no longer accept a US tax return where "applied for''. "NRA'', or a blank space appears on the line where the Social Security Number (SSN) should be entered. Where a return is filed erroneously which shows a refund due and either spouse's SSN is missing, the refund will be held up until a tax identification number is given to the IRS. Where a tax identification number is missing for a dependent, the return will be processed and the tax computed as if the dependent did not exist.

What Is a Tax Identification Number? For most US citizens, their Social Security Number is their tax identification number. Foreign nationals who have an unrestricted right to work in the United States can obtain a Social Security Number by first obtaining an Employment Authorisation Document from the Immigration Service, and using that document as the basis for obtaining a Social Security Number.

Any foreign national required to file a US tax return who does not have a SSN, must apply for an obtain a Individual Taxpayer Identification Number (ITIN).

Spouse and dependents listed on a tax return must also obtain a number.

What Is the Purpose of An ITIN? ITIN's are used for account identification purposes during the processing of the US tax return by the IRS. They can not be used to immigrate to the United states nor are they an authorization to work in the United States.

What If I Already Have a Temporary Identification Number Issued By the IRS? Up until July, 1996, the IRS issued temporary identification numbers that looked like a SSN except for the fact that all numbers started with "9'', thus earning the nickname, the "900'' series. These numbers are no longer valid. If you have one, you should immediately apply for an ITIN.

How Does One Apply for an ITIN? You will need to obtain and complete IRS Form W-7, Application For IRS Individual Taxpayer Identification Number. The completed Form. As well as an original of your birth certificate, passport, or other proof of your status must accompany the Form. We would not recommend your sending originals via either US or Foreign mail. Instead make a copy of all the documents needed, and take the original and the copy to the US Consul General in Bermuda and request that they certify the copy. The Form and the certified copies should then be sent to the: Internal Revenue Service ITIN Unit, Box 447 Bensalem, PA 19020 A copy of the Form can be obtained by writing to the IRS at the above address.

The tax advice given in this column is, by necessity, general in nature. You should, of course, check with your own US tax consultant as to how specific transactions affect you since tax advice varies with individual circumstances.

James Paul Sabo, CPA, is the President of Expatriate Tax Services, PO Box 617, Bernardsville, NJ, and is associated with GulfStream Financial Ltd. In Bermuda.