The short answer
To start a U.S. business on solid financial footing: confirm your immigration status allows you to work in or own the business, form an LLC or corporation, get an EIN, open a separate business bank account, keep books from day one, and set up estimated tax payments. Reporting all income, including cash, is what builds the credit history, Social Security record and financial statements you'll need to grow.
Step 1: Check your immigration status first
Owning a business and working in it are different things under immigration law. Some visa holders (for example, many on H-1B or F-1 status) can invest in or own a company but can't actively work for it. Talk to an immigration attorney before you start operating. It's the most important financial decision in this guide.
Step 2: Choose a structure
- Sole proprietorship: simplest, but no liability protection.
- LLC: protects personal assets and is flexible for tax purposes. The most common choice.
- Corporation: suits outside investors. Non-resident aliens can't own S corp shares, which matters for mixed-status families.
Step 3: Get your tax ID numbers
- EIN (Employer Identification Number): the business's tax ID. Free from the IRS. Apply online if you have an SSN or ITIN, or by Form SS-4 if not.
- ITIN (Individual Taxpayer Identification Number): for individuals who need to file U.S. taxes but aren't eligible for a Social Security number. Apply with Form W-7.
Step 4: Separate your money
Open a business bank account and use it for every business transaction. Mixing personal and business money is the most common and most expensive first-year mistake. It makes bookkeeping unreliable, weakens your liability protection and makes lenders hesitant.
Step 5: Know your tax obligations
- Report all income, including cash and payment app income. Payment platforms report to the IRS too.
- Self-employment tax of 15.3% funds your Social Security and Medicare. Unreported income builds no Social Security credits for your retirement.
- Pay estimated taxes quarterly if you expect to owe $1,000 or more.
- If you pay workers, decide correctly between employees (W-2, payroll taxes) and contractors (1099-NEC).
- Register for state sales tax if you sell taxable goods or services.
- Federal beneficial ownership (BOI) reporting currently doesn't apply to companies formed in the U.S. following FinCEN's March 2025 rule, but check before you file because rules can change.
Step 6: Build a financial record from day one
Clean books and filed returns are what let you get a business loan, a lease, a mortgage or investors later. Every year of accurate records makes the next opportunity easier to reach.
General information based on federal law for tax year 2026, not tax advice for your situation. State rules vary.