𝑭𝒊𝒍𝒊𝒏𝒈 𝑻𝒂𝒙𝒆𝒔 𝒂𝒔 𝒂 𝑵𝒆𝒘 𝑰𝒎𝒎𝒊𝒈𝒓𝒂𝒏𝒕 𝒘𝒊𝒕𝒉 𝒂 𝑺𝒎𝒂𝒍𝒍 𝑩𝒖𝒔𝒊𝒏𝒆𝒔𝒔: 𝑴𝒂𝒙𝒊𝒎𝒊𝒛𝒊𝒏𝒈 𝑹𝒆𝒇𝒖𝒏𝒅𝒔 𝒘𝒊𝒕𝒉 𝑺𝒄𝒉𝒆𝒅𝒖𝒍𝒆 𝑪

If you’re a new immigrant running a small business, understanding how to file your taxes and deduct business expenses can feel overwhelming. But don’t worry! Schedule C is a tool that can help you report income and claim deductions to lower your taxable income—and potentially maximize your refund.

Here’s how it works, with tips and examples to make it simple.

 
What is Schedule C?
Schedule C is part of your individual tax return (Form 1040). It’s used to report income and expenses for your small business or self-employment activities. If you’re a freelancer, gig worker, or run your own business, this form helps the IRS determine your taxable profit after expenses.

 
Common Deductible Expenses
You can deduct many costs directly related to your business. These deductions lower your taxable income, which can mean paying less in taxes or receiving a larger refund.

Here are some examples:

Home Office: If you work from home, you can deduct a portion of your rent, utilities, and internet based on the space used exclusively for business.
Example: If your home office is 10% of your house, you can deduct 10% of your rent and utilities.

Mileage: If you use your personal car for business (e.g., driving to client meetings), you can deduct mileage or actual car expenses like gas and maintenance.
Tip: Keep a mileage log to stay accurate.

Supplies: Office supplies, tools, or equipment you need to do your work are deductible.
Example: A graphic designer can deduct the cost of design software or a new computer.

Advertising: Costs for marketing, like social media ads, business cards, or website hosting, are deductible.

Professional Services: Fees paid to accountants, legal advisors, or consultants related to your business can be deducted.
 
How to File and Stay Compliant

Keep Records: Save receipts, invoices, and bank statements for all business expenses. This is critical if the IRS asks for proof.

Separate Finances: Use a separate bank account for your business to make tracking easier.

Be Honest: Only claim deductions for legitimate business expenses. Don’t mix personal and business costs.
 
Pros and Cons of Using Schedule C

Pros:

Maximize Refunds: By deducting expenses, you reduce taxable income, potentially increasing your refund or lowering your tax bill.

Simple Filing: As a sole proprietor or small business, Schedule C keeps things straightforward without needing separate business tax returns.

Cons:

Higher Audit Risk: The IRS scrutinizes Schedule C filers more closely, so accurate records are a must.

Self-Employment Tax: You’ll pay both employer and employee portions of Social Security and Medicare taxes, which can be higher than standard employment taxes.
 
Key Takeaway

Schedule C is your ally in lowering taxes as a new small business owner. Deduct your legitimate business expenses, keep clear records, and separate personal from business finances. If you’re unsure, working with a tax professional can help you navigate the process confidently.

By using Schedule C wisely, you can maximize your refund and reinvest it into your growing business.

Remember: Filing taxes as a new immigrant doesn’t have to be complicated. Take it step by step, and you’ll be on your way to financial success!