Everybody has to file taxes. Whether you’re a citizen or not, you have to pay your fair share to the federal and state governments.
Filing taxes as an immigrant and small business owner can be intimidating, but it’s not as difficult as you might think. Learning how to file taxes for the first time will help you comply with federal and state tax regulations and can help you get a small business loan for your business.
Whether you own an LLC, corporation, or sole proprietorship, let’s take a look at how you can file your taxes for the first time as a business owner.
|Table of contents|
|1. Filing Taxes as a Business Owner for the First Time|
2. File Taxes as an LLC
3. File Taxes as a Corporation
4. File Taxes as a Sole Proprietorship
5. File Your Quarterly Taxes
6. File Taxes as an Immigrant
Filing Taxes as a Business Owner for the First Time
Ready to learn how to file taxes for the first time?
To make it as easy as possible, you should consider using professional tax software to file your taxes. Services like TurboTax, H&R Block, TaxAct, and others make it easy to file your taxes for free.
After choosing a tax software it’s time to start preparing to file. To begin, make sure your business information is up to date. If you work with any independent contractors, be sure to review their information.
Next, you need to gather all the necessary tax documents. This includes things like your EIN, SSN, receipts, invoices, bank statements, payroll records, and more, The specific documents depend on which type of business you operate, which we’ll discuss later in this article.
Be sure to also review any potential deductions, extensions, and reimbursements. Business expenses are often deductible, which can save you a lot of money when it’s time to pay your taxes.
Lastly, always be sure to consult a professional tax lawyer or accountant to make sure you are complying with all federal and state tax laws.
To learn more about filing your taxes as a business owner, keep reading: How to File Taxes for Small Businesses
How to File Taxes for the First Time as an LLC
Filing taxes as an LLC is much like filing taxes as a sole proprietorship. The forms you have to submit depend on whether you are the sole owner of the LLC or there are multiple owners.
If you are the only owner of your LLC, you need to submit a Schedule C (Form 1040). This is where you’ll report your business income and losses.
If there are multiple owners, either each owner is taxed individually or you can file Form 2253 to become an S Corporation, in which case the company will be taxed collectively. You also must fill out Form 8832 to tell the IRS which tax category you are choosing for your LLC.
Be sure to keep track of all of your receipts so that you can make tax deductions.
To learn more about filing your taxes as an LLC, keep reading: How to File Taxes as an LLC
How to File Taxes for the First Time as a Corporation
Filing taxes as a corporation is a little bit different than filing as any other business entity. Corporations must pay income taxes, taxes on dividends, and are responsible for payment of corporate taxes and shareholders.
To file taxes as a corporation, you need to fill out Form 1120.
Section 1 of this form will ask you for basic information about your corporation, including your company’s name, address, and date of incorporation.
Section 2 will require you to provide information regarding your business’ gross income, dividends, cost of sales, interest, royalties, and similar information.
For Section 3, you will have to enter your tax-deductible expenses. This might include rent, utilities, employee benefits, and other business-related expenses. Be sure to gather receipts for these expenses in case you are audited by the IRS.
In Section 4, you will need to list the portion of your income that is subject to taxes, reimbursement credits, and other any amounts you are owed.
Depending on your business activities, you may also have to submit Form 1125-A, Schedule J, Schedule K, and Schedule L.
How to File Taxes for the First Time as a Sole Proprietorship
If you are a sole proprietor, you will file taxes much like an LLC with a single owner.
This means you will need to fill out a Schedule C to report your income and expenses. Schedule SE is used to calculate the amount you have to pay towards Social Security and Medicare.
If you hired a contractor and paid them at least $600, you need to fill out Form 1099-MISC to report this expense.
Lastly, Form 1099-K is where you report any income from a third-party, transactions made with credit and debit cards, and payments made with PayPal. Online sellers must fill out this form.
Again, be sure to collect receipts for business-related expenses, such as mileage, travel expenses, equipment, and more, so that you can maximize your tax deductions.
To learn more about filing your taxes as a Sole Proprietorship, keep reading: How to File Taxes as a Sole Proprietorship
How to File Your Quarterly Taxes for the First Time
If you are an independent contractor or sole proprietor, you have to file quarterly taxes. This is because your taxes aren’t taken from your paycheck like they would be if you were a W-2 employee. So, instead, you must pay estimated taxes every three months.
First, you need to calculate how much you owe based on your adjusted gross income. Your payments depend on how much money you expect to make from your business during the tax year.
Take your AGI and multiply it by your income tax rate according to the 2019 tax bracket. Then, divide this number by four to get your quarterly payment amount.
To file the quarterly taxes, fill out Form 1040-ES. You can send a check along with this form or pay using the IRS online payment platform. If you pay directly from your bank account, there will be no fee. However, if you use a credit card, you will have to pay a small fee.
Paying quarterly taxes is very important as you may be subject to penalties and fines if you don’t pay your estimated taxes on time.
How to File Taxes for the First Time as an Immigrant
Many immigrants don’t pay their taxes, either because they don’t know whether or not they can pay taxes or because they don’t know how to do it.
However, immigrants of any status can and are required to file taxes. If you are undocumented, there are privacy protections in place to keep your information private from immigration officials.
Typically, people pay taxes using their Social Security Number (SSN); however, as an immigrant, you may not have one of these. Instead, you need to get an Individual Taxpayer Identification Number (ITIN).
An ITIN is a nine-digit tax processing number issued by the IRS to allow people without an SSN to pay their taxes. You can also use your ITIN to apply for a loan, open a bank account, and more, so you should be sure to get yours as soon as possible.
To learn more about filing your taxes as an immigrant, keep reading: Can Undocumented Immigrants File Taxes in the U.S.?
It’s Time to File Your Taxes
Learning how to file taxes for the first time may seem intimidating, but it doesn’t have to be. As a business owner, it’s incredibly important to learn how to file taxes to comply with tax laws and so that you can apply for a business loan at Camino Financial — even if you don’t have an SSN.
By taking the steps listed above, you can file your taxes as a small business owner quickly, accurately, and easily.