Self-Employment in the US: What Immigrants Need to Know

Working independently in the United States is a real possibility for immigrants who wish to undertake, offer specialized services or act as consultants in the American market. However, the path to self-employment in the US involves legal, tax and immigration requirements that need to be understood before starting any activity. Acting without proper authorization can jeopardize not only your stay in the country, but also future immigration petitions before USCIS.

The American market values ​​independent professionals in areas such as technology, design, digital marketing, consultancy, translation and countless other specialties. The self-employment economy represents a significant portion of the US workforce, and international applicants with qualifications and adequate planning can successfully fit into this universe. The first step, however, is to ensure that the legal and tax basis is in order before issuing the first invoice.

Not every American visa authorizes self-employment. The tourist visa (B-1/B-2) and the student visa (F-1) do not allow autonomous remunerated activity, except for specific and limited exceptions in the case of the F-1, such as OPT (Optional Practical Training) regulated in 8 CFR § 214.2(f)(10). Starting work without proper authorization constitutes unauthorized employment, with consequences ranging from denial of future visa applications to deportation and inadmissibility bars provided for in INA § 212(a)(9).

Among the visas that can enable self-employment in the USA, the O-1 stands out, intended for professionals with extraordinary abilities in science, arts, education, business or athletics, regulated in INA § 101(a)(15)(O) and 8 CFR § 214.2(o). The E-2, treaty investor visa provided for in INA § 101(a)(15)(E)(ii), allows the holder to manage his or her own business in the United States as long as his or her country of origin has a bilateral treaty with the United States. The EB-2 NIW (National Interest Waiver), based on INA § 203(b)(2)(B), allows self-petition via Form I-140 for the green card, and once permanent residency is obtained, the holder has complete freedom to act independently.

For those who already have a green card, there are no restrictions on the type of professional activity. Permanent residents can work as employees, open businesses or freelance without limitations. Analyzing the appropriate visa for each professional’s profile is the first step in planning an independent career in the United States without compromising immigration status.

Although not required for all types of self-employment, registering a business in the United States offers significant advantages. The most popular structure among freelancers is the LLC (Limited Liability Company), which provides separation of personal and business assets, liability protection, and tax flexibility. By default, a single-member LLC is treated by the IRS as a disregarded entity, with income reported directly on Schedule C of Form 1040.

Opening an LLC varies by state, but generally involves registering with the Secretary of State, obtaining an Employer Identification Number (EIN) from the IRS using Form SS-4, and opening a business bank account. States like Wyoming, Delaware, and Florida are particularly popular with entrepreneurs due to their favorable tax structures, low maintenance fees, and streamlined registration processes.

Even those who choose to act as an individual professional, without opening a formal company, need a tax identification number: the SSN (Social Security Number) for those who already have work authorization, or the ITIN (Individual Taxpayer Identification Number) for those who need to declare income but do not yet have an SSN. The ITIN is requested using Form W-7 and has a limited validity, requiring periodic renewal if there has been no tax return in the last three years.

The American tax system imposes specific obligations on self-employed workers. In addition to federal and, in many cases, state income tax, independent professionals are responsible for paying the Self-Employment Tax, which covers contributions to Social Security and Medicare. This rate corresponds to approximately 15.3% of net income from self-employment (12.4% for Social Security up to the annual limit and 2.9% for Medicare without a cap).

Unlike a traditional employee, whose employer withholds and remits part of their taxes automatically, a self-employed person must make quarterly estimated payments to the IRS via Form 1040-ES to avoid penalties and interest. The annual tax return must include Schedule C, which reports profits and expenses from self-employment, and Schedule SE, which calculates the Self-Employment Tax due.

Keeping detailed records of all business income and expenses is essential. Legitimate expenses such as work equipment, software, office space (including the home office deduction regulated in Section 280A of the Internal Revenue Code), professional travel and insurance can be deducted, reducing the tax base. Relying on an accountant who specializes in US taxation and international treaties is highly recommended, especially for international investors who maintain income in their home country and need to navigate the rules of bilateral tax treaties and the Foreign Tax Credit (Form 1116).

The lack of automatic employment benefits is one of the most significant differences between self-employment and formal employment in the United States. The freelancer does not receive health insurance from the employer, does not have paid vacation and does not count on employer contributions for retirement. This makes personal financial planning absolutely essential for anyone who chooses this type of work.

Health insurance can be obtained individually on the marketplace created by the Affordable Care Act or through professional associations that offer group plans. For retirement, there are specific options for self-employed people, such as the SEP IRA, which in 2024 allows contributions of up to 25% of adjusted net income capped at $69,000, and the Solo 401(k), which combines employee and employer contributions and offers robust tax advantages.

Maintaining an emergency fund equivalent to at least six months of expenses is a prudent precaution, considering that a self-employed person’s income can vary considerably from month to month. Formalizing clear contracts with each client, detailing scope, deadlines, payment terms and intellectual property clauses, is also an essential protection against default and commercial disputes.

The American market is competitive, but it values ​​specialization and quality. Platforms like LinkedIn, Upwork and Toptal are starting points for finding opportunities and building a client base. Having a well-structured professional portfolio, mastering English and investing in face-to-face and digital networking are determining factors for success.

Immigrants working in specific niches like software development, data science, UX/UI design, marketing to multilingual markets, or international business consulting often find solid demand in the United States. Cultural diversity and multicultural experience are valued assets in an increasingly globalized market. Professionals who combine technical competence with cultural understanding of the American market and mastery of immigration and tax obligations have significant competitive advantages to build a sustainable and legally solid autonomous career in the USA.

Victoria Harper

Editor-in-Chief

Meet the author

Leading journalism and editorial content at Visto n’ Visa, Victoria helps make immigration topics clear, trustworthy, and easy to understand. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.