Summary
Understanding US federal taxes helps you keep more money, avoid surprises, and make proactive financial decisions. Start with filing basics, use software or pro help, and pay attention to deductions, withholding, and credits.
Tax Guide for Small Business Owners
Filing season doesn't have to be a source of stress. If yoursmall businessbrings in freelance income, real estate earnings, or capital gains, this simplified US tax guide is for you.
1. Do You Need to File?
File if you owe federal income tax or had any withholding.
Self-employed or freelance income over $400? You must file and pay self-employment contributions.
Filing can still trigger a refund even if you owe nothing.
2. Filing Tools and Services
Options: paper, digital tax software (likeTurboTax), or hire aCPA.
IRS Free Filehelps with simple tax returns.
More income sources = more complexity (and often more cost).
3. What Counts as a Deduction?
Standard deduction (2024):$14,600 for singles, $29,200 for married couples.
Itemize if needed:mortgage interest, state/local taxes, donations.
Other deductions:IRA contributions, student loan interest, and part of self-employment tax.
4. Understanding Tax Brackets
Income is taxed progressively, bracket by bracket.
Only the incomewithina bracket is taxed at that rate.
5. Get Withholding Right
Use updatedForm W-4.
Use theIRS estimatorif you’ve got multiple income streams.
Ideally? Owe a little or get a small refund. Keep cash flow smooth.
6. Tax Credits vs. Deductions
Credits reduce your taxbilldollar for dollar.
Big ones:Child Tax Credit,Earned Income Credit,Education Credit.
Some are refundable—meaning you get a refund even if you owe nothing.
7. Other Tax Types to Know
Self-employment tax:covers Medicare + Social Security (15.3%).
Capital gains tax:varies by holding period + income (0%, 15%, 20%).
State/local taxes:may apply depending on where you live.
FAQs
Q: Should I hire a tax professional?
A: If you have freelance, rental, or multi-state income—it’s usually worth it.
Q: What if I missed the filing deadline?
A: No penalty if you’re due a refund. If you owe, file ASAP to avoid penalties.
Q: Still time to contribute to an IRA?
A: Yes! You’ve got until tax day (usually April 15) to get it in.
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Author: Kimi, Co-founder of Sam’s List
Kimi writes about what she's learning while building Sam’s List and shares honest takeaways from her conversations with accountants and financial advisors across the country. None of this is financial advice—just the stuff most people wish someone told them sooner.
