Every year, millions of companies, entrepreneurs, and business owners in the United States must comply with one of their main fiscal responsibilities: filing their tax returns. Although the process may seem complex, understanding the steps, requirements, and benefits is key to avoiding penalties, taking advantage of deductions, and maintaining the financial health of your business.
In this guide, you will find everything you need to understand how to file taxes in the U.S., which forms to use, what the deadlines are, and what aspects you should consider to avoid mistakes.
What is a Tax Return?
A tax return is an annual report that every individual or business must file with the Internal Revenue Service (IRS). It details income, expenses, tax credits, and tax liabilities for the previous fiscal year.
Through this document, the IRS determines whether you have already paid the appropriate amount of taxes through withholdings during the year or if you still owe additional money. In some cases, it may also turn out that you have overpaid, and the government will return the difference to you in the form of a refund.
Who is Required to File Taxes?
In the United States, the obligation to file taxes depends on factors such as:
Income Level: For 2025, a single individual must file if they earned $14,600 or more during the year. For married couples filing jointly, the threshold was $29,200.
Filing Status: Single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with a dependent child.
Source of Income: Employees, self-employed individuals, independent contractors, and business owners are required to file.
Age: Income thresholds may vary if the taxpayer is over 65 years old.
For businesses, filing a tax return is always mandatory, regardless of whether they made a profit or a loss.
Most Common Tax Forms
Depending on your employment or business situation, you will need to use different forms. The most common ones are:
Form W-2: Provided by employers to their employees, it shows the income earned and taxes withheld throughout the year.
Form 1099-NEC or 1099-MISC: Used for independent contractors, freelancers, and businesses that receive payments of over $600.
Form 1040: This is the primary form for individual income tax returns. All individuals must complete it.
Schedules: These allow you to report additional income, specific deductions, or special taxes.
Businesses must also file additional forms depending on their legal structure (LLC, C-Corp, S-Corp, etc.).
Types of Income Taxes in the U.S.
Income tax in the United States is applied at both the federal and state levels:
Federal: Mandatory nationwide, with rates ranging from 10% to 37% depending on income level.
State: Most states impose an additional income tax. Only a few, such as Texas, Florida, or Nevada, do not require it.
Local: Some counties and cities also apply their own taxes.
Tax Credits and Deductions
One of the main advantages of filing your tax return correctly is accessing tax benefits that reduce the amount you owe.
Standard Deduction: A fixed amount set each year based on your filing status.
Itemized Deduction: Allows you to report expenses such as mortgage interest, charitable donations, or medical expenses.
Tax Credits: These include the Child Tax Credit and the Earned Income Tax Credit (EITC), which can even result in a refund if your taxes have already been covered.
How to File Your Taxes Step-by-Step
Confirm if you are required to file. Check the income thresholds published by the IRS each year.
Gather all your tax documents. This includes W-2s, 1099s, receipts for deductible expenses, bank statements, and your previous year's tax return.
Select the correct form. For individuals, Form 1040 is essential, while businesses have specific schedules depending on their structure.
Decide on your filing method. You can file your return electronically (faster and more secure) or by mail.
Review before sending. Errors in basic information like your Social Security Number, ITIN, or miscalculated figures can lead to penalties.
Pay or receive your refund. If you owe taxes, make the payment to the IRS and your respective state. If you overpaid, you can receive the refund directly in your bank account.
Key Tax Deadlines
April 15: The deadline to file your annual tax return.
October 15: The extended deadline, only valid if you requested an extension before April 15.
Quarterly Payments: Self-employed individuals and businesses must make estimated tax payments each quarter to avoid penalties.
Tips to Avoid Common Mistakes
Ensure all income is reported, including earnings from freelance work.
Keep records of deductions and donations for at least seven years.
Don't wait until the last day to file; calculation errors and delays are common at that time.
Be aware that failing to file your return can result in penalties of up to 25% of the amount owed.
Frequently Asked Questions about Tax Returns
What happens if I don't file my tax return in the U.S.?You could face financial penalties, interest on the amount owed, and even legal trouble.
Which form should I use for my tax return?Form 1040 is the primary form for individuals. For businesses, it depends on the structure (for example, LLCs and corporations use additional schedules).
Can I get a refund if taxes were already withheld during the year?Yes. If your employer withheld more than necessary or if you qualify for tax credits, you will receive a refund.
What is the difference between a deduction and a tax credit?A deduction reduces your taxable income, while a tax credit directly reduces the amount of tax you owe.
Do businesses always have to file taxes even if they don't have profits?Yes, every business in the U.S. must file an annual tax return, regardless of whether it had profits or losses.
An Ally for Your U.S. Tax Compliance
Filing your tax return correctly is essential for any company or entrepreneur wanting to operate in the United States without setbacks. Mistakes in this process can lead to unnecessary fines, delays, and legal complications.
At Openbiz, we specialize in the administrative and tax management of U.S. companies, guiding you every step of the way to ensure you meet your tax obligations safely and efficiently. If you're ready to simplify your next tax season and ensure your business is in good standing, contact us today and let us help you file your return with confidence.
Schedule a consultation with an advisor to solve all your doubts.
