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Entrepreneurship in the United States has never been so active. In 2023, 5.5 million applications were submitted to open new businesses, an all-time record according to the U.S. Census. UU. That's in addition to the 33.3 million small businesses that are already operating and that employ about 46% of the private workforce, according to the SBA. If you are an immigrant and you have an ITIN (or are about to obtain one), 2025 may be your year to formalize your business, optimize your taxes and start building personal and business credit.
Why formalize your business in 2025
- More opportunities: The entrepreneurial boom makes it easier for suppliers, clients and financing, but they will ask you for legal structure and records.
- Protection and trust: An LLC can protect your personal assets and improves perception before banks and partners.
- Tax benefits: Separating income and deductions helps you pay fairly and prepare for future credits and loans.
ITIN: The Key to Filing Taxes and Formally Operating
- What it is: The ITIN is an IRS number for those who don't qualify for SSN, but need to file taxes.
- What is it for: File taxes, open accounts (depending on the bank), receive 1099/1042-S, and document income (key to credit and, eventually, mortgage).
- How to get it: Form W-7 with proof of identity/status. You can do this with the assistance of a CAA or tax professional.
Legal structure: LLC vs. sole proprietor
- Sole Proprietor:
- Pro: simple, low initial cost.
- Cons: no legal separation; you and the business are the same.
- LLC:
- Pro: legal separation of responsibility; flexible in taxes (by default “pass-through”).
- Cons: costs and state reports.
- What to choose: Depends on risk, projected revenues, partners and status. The SBA offers comparative guidance. At La Familia Multiservices we guide you according to your goals and state of residence.
Separate finances: bank account and records
- Why it matters: In addition to protecting you, it facilitates accounting, deductions and access to credit.
- Key fact: Although the percentage of households without banks fell to 4.5%, among Hispanics it was 9.3% (FDIC). This delays access to formal financial products and credit.
- Steps:
- Get your EIN for free from the IRS.
- Open business checking account with your LLC/DBA, EIN and ITIN.
- Use a simple accounting system and save receipts (digital and physical).
Building credit without SSN: yes it's possible
- Market reality: 26 million adults in the U.S. In the United States, they are “invisible credit” and Hispanic communities are more likely to be so (CFPB). The challenge is to start reporting payment behavior.
- 0-6 month strategy (personal and business):
- Insured: Credit card secured with ITIN at institutions that accept it.
- Rent/service report: Use services that report rent and utilities to bureaus.
- Phone/Internet in the name of the business and timely payments.
- Net-30 providers who report to business bureaus (e.g. D&B).
- 6-12 month strategy:
- Small business line of credit with your bank (if there is a history).
- Business credit card with ITIN/EIN.
- Keep utilization low (< 30%) and zero delays.
- Fiscal-financial advice: Reporting all your income and keeping financial statements clean helps you qualify for funding. Your tax returns are key evidence of ability to pay.
Taxes you should plan as an entrepreneur
- Self-employment tax: 15.3% (Social Security and Medicare) on net earnings, in addition to income tax depending on your bracket.
- Estimated quarterly payments: They are generally due on April 15, June 15, September 15, and January 15 of the following year. They avoid underpayment penalties.
- Fundamental records:
- Contracts and invoices
- Receipts and statements
- Revenue/Expenditure Ledger
- Forms 1099-NEC/1099-K received
Route to the house with ITIN: prepare the ground
- Overview: Mortgage demand from Latino families will continue to grow; Urban Institute projects that from 2020 to 2040 Hispanics will account for nearly 70% of net homeownership growth.
- What lenders look at:
- Consistent history of reported income (2 years helps a lot).
- Healthy debt-to-income ratio.
- Documented down payment and savings.
- Your checklist:
- Current tax returns (with ITIN).
- Systematic savings in a bank account.
- Report income and profits to the bureaus to strengthen the record.
- Build personal and, if applicable, business credit.
90-day action plan
- Week 1-2: Consultation to choose structure (LLC/DBA) and fiscal plan. Apply for EIN.
- Week 3-4: Open a business bank account. Implement billing and expense recording.
- Month 2: Applies to the insured card (ITIN) and to 1-2 net-30 reporting providers.
- Month 3: Establish estimated payment schedule and a tax fund (set aside 25-30% of net earnings as a general guide; adjust with your preparer).
6 to 12 months
- Submit your first clean and complete business statement.
- Ask for a limit increase or a second card to improve capacity.
- Evaluate a business line of credit and, if your goal is housing, consult mortgage options with ITIN.
How La Familia Multiservices helps you
- Taxes and ITIN: Preparation, renewal and strategy to legally maximize deductions.
- Business creation: LLC/DBA, state registration, annual compliance and licensing guidance.
- Smart finance: Accounting organization, quarterly estimates and preparation of statements for credit.
- Real estate: Financial preparation to qualify for a mortgage (including options with ITIN) and purchase plan.
Schedule a free evaluation to review your case and come up with a clear tax-financial plan for 2025.
Sources and data
- U.S. Census Bureau, Business Formation Statistics (BFS). 2023 recorded a record of ~5.5 million requests for new businesses. https://www.census.gov/econ/bfs/
- U.S. Small Business Administration, Office of Advocacy. United States Small Business Profile, 2023:33.3 million small businesses; approx. 46% of private employment. https://advocacy.sba.gov/2023/08/29/2023-small-business-profiles-for-the-states-territories-and-nation/
- IRS: Individual Taxpayer Identification Number (ITIN). What it is and how to apply for it (Form W-7). https://www.irs.gov/individuals/individual-taxpayer-identification-number
- IRS: Employer Identification Number (EIN). Request and use. https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers
- SBA: Choose a business structure. Comparison of structures. https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
- FDIC: National Survey of Unbanked and Underbanked Households, 2021. Unbanked household rate 4.5%; Hispanics 9.3%. https://www.fdic.gov/analysis/household-survey/
- CFPB: Data Point: Credit Invisibles (2015). 26 million adults with no credit history. https://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf
- IRS: Self-Employment Tax (Social Security and Medicare Taxes). 15.3% rate and rules. https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
- IRS: Form 1040-ES (Estimated Tax for Individuals). Dates and calculation of estimates. https://www.irs.gov/forms-pubs/about-form-1040-es
- Urban Institute: 2020—2040: Projections of Housing Growth. Hispanics will drive ~ 70% of net homeowner growth. https://www.urban.org/research/publication/2020-2040-housing-market-projections
