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Looking to start a new business?

The world is changing quickly, but there only ever seems to be more opportunity. 

Software, digital services, new product businesses, and entirely unique offerings never before seen.

Now is an incredible time to start a new business, if you can find something that fits what you’re looking for. 

That brings us to this guide. Below, you’ll find a list of the top trending business ideas of 2024.

They cover a variety of business types, industries, and skill set so that you’re sure to find something that piques your interest. 

Read on to find out more. 

20 Top Trending Business Ideas of 2024 (Definitive List, No Fluff)

The list below is our top picks for the most trending business ideas of the year.

Keep in mind that nothing on the list below is fluff. You may have read lists online with 50 “business ideas” only to be hit with the same basic businesses that have been around for more than a century (and aren’t getting any more popular– i.e. they’re not trending). 

That’s not what this list is.

Each of the business ideas below has been growing in popularity either starting this year or, as is more often the case, over the past several years. 

With that said, let’s get into it. 

These are our picks for the top trending business ideas of 2024: 

1. Online teaching

Online education and digital classrooms have become more popular than ever, and with it the demand for teachers willing to teach remotely. 

If you’re a credentialed teacher, this could be an amazing opportunity to be able to teach full-time while getting more time at home and with family.

2. Remote bookkeeping

Bookkeeping is another service that went remote in the past several years.

You can now find clients online without ever having to leave your home on freelance sites like Freelancer and UpWork, as well as by networking on sites like LinkedIn.

3. Catering

Some chefs in recent years have turned to catering as a viable business model. 

Catering is unique from opening a restaurant in that you don’t need to maintain a large brick and mortar space with high rent, only the space you need to prepare the meals and a delivery truck.

It also gives you more flexibility, as you know and set your schedule with your catering clients.

4. Translation services

If you know a second (or additional) language, you can find translation jobs for an assortment of different tasks online freelance.

Businesses are looking for translators to translate their websites and other marketing material into different languages, media needs translators, and even large content creators looking to scale their businesses. 

You can even scale those translation services yourself into a full-blown service company, making this easy to start up with room for growth.

5. Video production

The internet is largely dominated by video content now, meaning great videographers are in high demand. 

A video production company can handle everything from planning to scripts, shooting, and editing or just focus in on one or more of those if you’re already an expert there.

Many video production companies simply come up with video ideas, the client shoots them on camera, and then they edit and publish, making it a relatively easy business to manage if you know or are willing to learn video production. 

6. Create a newsletter

Paid newsletters have exploded in popularity in recent years. 

What was once exclusively free content (email newsletters) is now a lucrative paid venture, with many newsletters raking in six and seven figures just from paid subscriptions. 

If there’s a topic you have expertise in, or you’re simply obsessed with, or you have experience creating content, you can build a platform that offers a paid newsletter as its primary business model.

7. App development

Apps are as profitable as ever, including everything from digital tools to games. Plus, there’s lots of different opportunities, from developing apps for businesses to creating your own app based on a unique business idea. 

If you have software experience, the app development market is worth looking into, even if you’ve never made an app before but are willing to learn the in’s and out’s.

8. Social media marketing

Social media marketing has been a hot topic for several years, but it hasn’t slowed down by any means.

In fact, if anything it’s become a cornerstone of most business’s marketing strategy where before it seemed optional.

The advantages of a social media marketing agency is that you can focus in on the social channels you know best and become an expert at them. 

SMM agencies also tend to get paid quite well for client work while the work is relatively easy and doesn’t require high expertise.

9. Food truck

The food truck rage may have died out, but that doesn’t mean that they aren’t still incredibly popular.

Food trucks, similar to catering, are a great way to make use of your skills if you’re a certified chef without having to put up the same level of initial investment as you would have to with a restaurant. 

It also gives you the flexibility to hit the road while you get to make amazing food for your customers to enjoy.

10. Photography

Similar to video, high-quality photographers are in high demand not only for the traditional events such as weddings, large events, and corporate functions but also for creating high-quality marketing material. 

If you’re a passionate photographer, there are lots of angles you can approach this and places you can hone in your niche to make a profit while you scale up the business.

11. Business consulting

Consulting is another booming freelance opportunity and one with great scaling potential.

Businesses all around the world are constantly looking to get ahead. If you have experience in anything that can help a business grow, you can build a company around offering that expertise as a business consultant.

12. Self-storage 

As families all around the country have downscaled and the largest group of retirees ever in U.S. history retires, self-storage has grown in popularity.

The baby boomer generation have set out in their RVs or simply downscaled to meet their reduced retirement income, leading to self-storage to become highly sought after. 

If you’ve done real estate or service before, self-storage is a great business to consider. Hours run long unless you hire help and you need initial capital to purchase your storage facility, but the margins are high and the business type stable.

13. Daycare provider

Home-based daycares are still around and have increased a fair bit in popularity recently, making a daycare an easy business idea to start up and scale.

If you love children and want to pursue childcare as a career but teaching isn’t quite for you, this is a great option to consider.

14. Mobile auto repair

Mobile mechanics have become more and more popular over the past few years, with full-fledged businesses with entire fleets of mechanics cropping up all around the country.

If you’re a mechanic looking to make some extra money on the side while also having the potential to scale the business into something more, starting a mobile mechanic business is a great option to consider.

15. Website development

Similar to app development, website development has been popular for some time but hasn’t slowed down. 

It is true that services such as Wix have made it easier than ever to create a website for cheap yourself, turning many lower-priced clients away. 

However, where the real money lies is in servicing higher-priced clients who want custom websites (often based on WordPress) that these services don’t offer and can’t match.

16. Business startup and planning

New business owners and seasoned business owners looking for every advantage both often use business planning and startup services to help them get off the ground right.

This can be something as simple as market research and business plan creation to something more extensive such as helping with the startup process. 

It really all depends on your level of expertise and where you’re at. This makes it a great business for starting without much investment while also having lots of room for growth.

17. SEO consultant

Like video production and social media, SEO is a pillar of modern marketing.

SEO can be a bit more complex than video production and especially social media marketing, but learning it helps you develop valuable skills that companies will pay top dollar for.

It’s also easy to get started freelance while you develop your skills and portfolio and work on scaling the business. 

18. Subscription box

Subscription boxes hit it off a few years back, but the space has continued to grow and become larger since. 

The cool thing about subscription box businesses is that there are a limitless number of things you can base the business– and your boxes– on.

Pick a physical product associated with a passion of yours and see if a company exists already that offers a subscription box for that thing. 

If there is, you know there must be some sort of demand for it and it’s likely a business idea worth considering. 

19. Beauty brand

Producing your own custom beauty products has become incredibly easy with platforms online that help you link up with suppliers and manufacturers for everything from packaging to the actual beauty products themselves. 

If you have experience in content or beauty, or are simply willing to learn, you can create a brand around yourself and launch a beauty brand through it using social media platforms like TikTok and Instagram as your launching pad.

20. Career coach

Millennials and Gen Z are most interested in development opportunities(Gallup), especially as it relates to jobs. This in part has made career coaches more popular than ever.

As a career coach, you can pivot into an entirely new direction by taking an existing expertise and teaching others how to build a career around it. 

Plus, you can get official certification through something such as the CPCC to get a boost of credibility, which will help you obtain clients faster (and better clients). 

Find An Idea Worth Pursuing?

There are countless amazing business ideas out there, but the one that’s best for you will bring together a combination of your:

• Experience and knowledge
• Passion
• And motivations 

Consider not only what works for you but also what the world needs and how you can carve a niche in a way that helps you stand out.

Also consider how much startup capital is needed to start your new business, as every business has different startup costs.

When you’re ready to grow your business, Excel Capital is here to provide the capital you need to go to the next level.

We hope this guide on the top trending business ideas of 2024 helped you find something worth pursuing.

What Is IRS Form 1120?

IRS Form 1120 is used by corporations to file their taxes. Specifically, to report their income, deductions, losses and gains, and credits. 

If you’re any type of U.S. corporation, Form 1120 (or some version of it) is the official IRS form you’d use to report your taxes. 

What is the difference between Form 1120 and 1120-S?

While Form 1120 is used by C corporations, Form 1120-S is specifically used by S corporations.

Before filing your taxes, make sure you have the correct version of Form 1120 for your corporation. 

Who Needs to File IRS Form 1120?

All corporations (unless exempt under Section 501), are required to file their tax returns using Form 1120. 

LLCs, however, don’t generally use Form 1120. 

Multi-member LLCs are typically treated as partnerships and must file Form 1065. 

Single-owner LLCs aren’t treated as a separate entity and report their income and deductions on their owner’s tax return. 

How to File IRS Form 1120: Step-by-Step Instructions

Form 1120 is one of the more complex IRS forms given it’s designed for corporate taxes.

However, there’s a good chance that much of it doesn’t apply to your business, so don’t be overwhelmed. 

It’s highly recommended to use a tax professional or at least software online to file your corporate taxes.

Not only to make sure that they’re accurate, but also just to get a little help (filling this out on your own can be time-consuming). 

With that said, let’s break down each section step-by-step:

1. Fill in your personal information

Straightforward, fill in your basic information including name, address, EIN, date incorporated, etc:

2. Fill in your income

Next, fill in your income breakdown: 

Make sure to add up the total on line 11 after adding all your information in. 

3. List out your deductions

Next, list out all of your deduction totals:

Again here, add up the total amount on line 27 as well. 

4. Credits and payments

Now, you’ll input all relevant credits or payments:

5. Sign and date

Finally, sign and date at the bottom:

Make sure to leave the section labeled, “Pair Preparer Use Only” blank as that is reserved only for when you pay a tax professional to prepare your tax return for you. 

Check out our guide on small business tax tips for additional tax filing tips.

Do I Need to Fill Out Schedule (C, J, K, L, M-1, M-2)?

Form 1120 has several additional sections included, those being schedules:

• C
• J
• K
• L
• M-1
• And M-2

Here’s how to know if you need to fill out one or more of these IRS Schedules: 

Schedule C

If you’re a solo business owner, there’s a chance you may have to fill out Schedule C.

Schedule C is designed for reporting earnings for individual business (usually sole proprietor) earnings. 

Learn more about Schedule C. 

Schedule J

Schedule J is designed for business owners who make a majority of their income through farming or fishing. 

Learn more about Schedule J. 

Schedule K

Schedule K is designed to report individual earnings or partnership income. If you’re in any kind of partnership, you may need to fill out Schedule K. 

Learn more about Schedule K.

Schedule L

If you’re a C corporation with total assets that exceed $10 million, you must file Schedule L along with your Form 1120. 

Learn more about Schedule L. 

Schedule M-1 and M-2

If your corporation’s gross receipts (or total assets) are greater than $250,000 at the end of the tax year then you typically need to complete Schedule M-1 (and possibly M-2) when filing.

Learn more about Schedule M-1. 

What Is the Deadline for Filing Form 1120?

Form 1120 is due on the 15th day of the 4th month after the end of the corporation’s tax year.

If your corporation uses a fiscal tax year ending June 30th, you’d file by the 15th day of the 3rd month after the end of your tax year. 

Can You File Electronically?

Yes, Form 1120 can be filed online or through mail.

However, make sure to check first to see if the software you’d like to use is authorized to e-file Form 1120 first. 

See this document for the approved list of software providers for e-filing: Publication 4163 (Rev. 12-2023). 

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What Is IRS Form 9465?

IRS Form 9465 is used for requesting and implementing an installment agreement on tax payments.

Typically, Form 9465 is used when someone files their taxes but finds that they owe more than they can immediately pay.

 In that case, you can file Form 9465 and begin making installment payments on your taxes due.

However, keep in mind that even if you have Form 9465 in place with the IRS, they’ll still charge you late penalties and interest on those payments.

Who Should (and Shouldn’t) File Form 9465?

If you’ve just filed your taxes and the amount you owe is more than you can pay, you should file Form 9465. 

With that said, not everyone can file for an installment agreement with the IRS. There are several situations outlined by the IRS that will keep them from approving your request for an installment agreement.

Assuming don’t owe more than $10,000 in taxes, you as the taxpayer must meet these requirements to be automatically approved for an installment agreement:

• Must have filed all necessary previous tax returns
• You haven’t entered into a previous installment agreement within the past 5 years
• You can pay the entirety of your back taxes within 3 years

What Are My Payment Plan Options?

According to the IRS, they offer two payment plans depending on your balance:

• Long-term (i.e. an installment agreement): If you owe $50,000 or less in combined tax, penalties, and interest.
• Short-term payment plan: If you owe less than $100,000 in combined tax, penalties, and interest.

You must fit one of these qualifications to set up a payment plan using Form 9465 with the IRS. 

How to Fill Out Form 9465

Now, let’s talk about how to fill out Form 9465.

It’s a short form but has lots to potentially check off and fill in, so it can be a little intimidating.

Fortunately, it’s an easy form to complete and doesn’t take long. 

You have two options for completing Form 9465 and requesting an installment agreement:

e-File online

By far the easiest and fastest way to complete Form 9465, most major tax preparation software such as TurboTax is authorized to complete Form 9465 for you. 

Unless you have a preference for physically mailing it in, this should be the method you choose as it will get you a response faster.

Fill out and send through mail

Filling out and mailing Form 9465 is an option as well. Start by downloading and printing Form 9465 here: Form 9465. 

Start by filling out your basic information:

Form 9465 is separated into just two major sections, but each has quite a bit of questions.

However, in Part I, the questions are for the most part easy and straightforward:

Once Part I is complete, it’s simply on to Part II to finish up the form:

Again, quite a few basic questions so not much difficulty:

Finally, don’t forget to sign and date it (located at the bottom of page one) and you’re all done!

If any section of Form 9465 is confusing, you can find out more information about how to fill out IRS Form 9465 directly from the IRS here: Instructions for Form 9465. 

Can You File Form 9465 Electronically?

Yes, you can file Form 9465 electronically through most major tax software.

However, you can only file electronically if the amount you owe is less than $50,000.

How to Set Up a Payment Plan with the IRS

To set up an installment plan with the IRS, use their Online Payment Agreement tool to sign up online and apply. 

You’ll need to create an ID.me account before logging into the platform, but once you’re in, simply follow the prompts and you can get everything done conveniently online:

How Much Will I Pay the IRS In Interest and Penalties?

When paying overdue taxes, interest and penalties typically cost:

• Penalties: .5% per month, not exceeding 25% of unpaid taxes
• Interest: Currently 8% per year (See latest IRS notice here)

Keep in mind that interest rates are subject to change, so the amount listed here may not be the current interest rate you’ll pay via your installment agreement.

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But growth is hard when banks and traditional institutions are approving fewer loan requests than ever. 

With Excel Capital, we offer a variety of powerful business funding tools, many which you can  be approved on with low or no credit and fund in as little as 24-48 hours.

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What Is Form 941?

IRS Form 941, Employer’s Quarterly Federal Tax Return, is used by employers to report income and payroll tax withholdings, Social Security, and Medicare tax burden. 

The complete list of items reported on Form 941 includes:

• Employee wages, including tips and other compensation
• Federal income tax withholdings (payroll)
• Medicare tax withholdings (employee and employer shares)
• Social Security benefits withholdings 
• Quarterly SS and Medicare tax adjustments for various reasons such as sick pay

While that is a lot of information, simply know that Form 941 will tell you what your overall payroll tax responsibility is for that quarter.

Who Needs to File IRS Form 941?

If you’re reading this, chances are you either already know you have to fill out Form 941 (in which case, feel free to skip to the next section) or you’re not sure yet.

So, let’s talk for a sec about who needs to fill out form 941.

Most businesses with employees must file Form 941 each quarter, with some exceptions typically in the form of the type of employee you employee:

• Business that employ maids and nannies
• Businesses that employee strictly farmworkers
• And seasonal businesses are only required to file during quarters in which they weren’t operational (i.e. they had no employees)

Each state and business type is different, however, and the list of who does and doesn’t need to fill out Form 941 is beyond the scope of this guide.

Make sure to check the IRS’s official page on Form 941 to verify if you need to fill it out or not: About Form 941, Employer’s Quarterly Federal Tax Return.

How to File IRS Form 941: Step-by-Step Instructions

IRS Form 941 is relatively simple and straightforward.

We suggest filing Form 941 through a tax preparation software, which will semi-automate the process for you and cut down on time.

However, if you need to manually fill out Form 941, here are step-by-step instructions:

*Note: Keep in mind, Form 941 comes with a payment voucher, which you’ll use if you’re required to submit payment with Form 941. 

1. Fill in your business information

First, start by filling out your basic business information at the top of the form:

Also, make sure to check off which quarter you’re reporting for to the right of that box here:

2. Complete Part 1: Wages and withholdings

Next, part one requires you to fill in an assortment of information related to wages and payroll tax for that quarter:

This is where you’ll note down your own numbers including SS payments, medicare withholdings, and payroll withholdings.

Keep in mind that line 5e is the total you get from adding 5a – 5d (SS wages and tips + Medicare wages and tips).

3. Complete Part 2: Deposit scheduling

The next section is quick and easy with straightforward instructions. You’ll simply note down at what frequency you deposit based on your payroll:

Note that if you’re a semi-weekly depositor, you’ll need to also fill out Schedule B of Form 941 and send it with Form 941. 

4. Complete Part 3 + 4

Parts three and four are, fortunately, short and to the point.

First, you’ll fill out whichever of the two questions in part three apply to you (if none, you can leave the section blank):

Part four is only relevant if you’re working with a CPA or other tax preparation specialist and you’re authorizing them to speak on your behalf with regards to your business return and Form 941.

5. Sign and date

Finally, finish by signing and dating at the bottom:

The section below your signature will only be used if you paid a tax preparer or CPA to complete Form 941 on your behalf, in which case they would sign here.

What Is the Deadline for Filing Form 941?

IRS deadlines for filing Form 941 is typically one month after the final day of the reporting window. 

That makes the reporting day for each quarter:

• Q1 (Jan, Feb, Mar): April 30th
• Q2 (Apr, May, June): July 31st
• Q3 (July, Aug, Sept): Oct 31st
• Q4 (Oct, Nov, Dec): Jan 31st

Keep in mind that you can obtain additional time if you’ve paid your employment tax deposits in full for that quarter. The IRS allows an additional 10 days to file, which would be added on top of the deadlines listed above. 

Can You File Electronically?

Yes, Form 941 can be filed electronically or by mail. 

See this IRS article for more information on which software is authorized to e-file Form 941.

Where to File Form 941

If you’re required to, or simply prefer, physically mailing Form 941, that’s an option as well.

Here’s a chart that shows exactly what address you should send Form 941 depending on what state you’re located in:

Important: If you do not have a principal place of business in any state, or a legal residence, you’ll need to mail Form 941 to one of the addresses below. 

For returns without payments included, send Form 941 to:

Internal Revenue Service

PO Box 409101

Ogden, UT 84409

For returns with payments included, send Form 941 to:

Internal Revenue Service

P.O. Box 932100

Louisville, KY 40293-2100

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That is, if you have the capital you need to grow and go where you know you can take it.

Banks and traditional funding institutions make obtaining a business loan nearly impossible. And, if you’re one of the lucky few, you’ll be waiting ages for approval and the deposit of funds.

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What Is IRS Form W-7 Used For?

IRS Form W-7 is an official IRS form used to obtain an Individual Taxpayer Identification Number. 

You typically need form W-7 for filing taxes with the IRS if you’re not a U.S. citizen and either don’t have, or aren’t eligible for, a social security number. 

However, it can also be used for:

• Obtaining a mortgage
• Employment settlement disputes
• Opening an interest-bearing checking account

Read on for a quick and easy guide to filling out Form W-7 and obtaining your ITIN. 

Do I Need an ITIN?

If you’re not a U.S. citizen or if you can’t obtain a social security number for another reason you must have an ITIN to legally pay taxes on U.S. earnings. 

You also may need an ITIN for other reasons, such as applying for an ITIN or opening an interest-bearing checking account. 

Can I Fill Out Form W-7 Online? 

The short answer is: No, in 2024 you can’t fill out Form W-7 or obtain an ITIN number online. 

With that said, be on the lookout for services that claim they can get you an ITIN online. 

They’re not helping you obtain an ITIN online but rather digitally obtaining your information when you submit their online form and then physically printing and mailing out your W-7 form for you. 

These services can not get you your new ITIN number any faster than you can if you simply fill out the form, print, and mail it yourself (and for much less than what they charge). 

How to Fill Out IRS Form W-7(Step-By-Step Instructions)

Unfortunately, the only way to submit Form W-7 and obtain an ITIN is by mail or in person.

However, it’s a simple one-page form that’s pretty self explanatory.

Just make sure to:

• Fill out any and all relevant information, and
• Do not leave any field blank. If a field doesn’t apply to you, write “NA” in the field instead of leaving it empty

Start by downloading the official PDF form here: Form W-7. 

Then follow these steps:

1. Select your reason for submitting

First, start by selecting the reason that you’re submitting Form W-7:

Note that the instructions state that unless your reason is “a” or “h”, you must submit your federal tax return with Form W-7.

2. Enter your name and address

Next, you’ll fill in your name and one or two addresses.

The first is your current address. The second is your foreign address:

If you no longer have a current foreign address, the place where you resided before coming to the U.S., then you’ll simply fill in the country in which you resided.

3. Other information

Form W-7 has a whole section for additional information, at least some of which is relevant to you:

Make sure to fill in any and all information that is relevant to you. 

Most importantly, notate what identification documents you submitted as well as previous or current countries of citizenship, foreign tax ID numbers, and Visa info (if you have one). 

Also, if you’re requesting a new ITIN, fill out sections 6e and 6f.

4. Sign and date

Lastly, sign and date your form:

Make sure to sign the top section and ignore the second as that is only relevant if you visit an acceptance agent in person. 

3 Ways to Submit Form W-7

While you can’t submit Form W-7 online, there are at least a few options for sending it out, two which allow you to handle it in-person (though the wait time for a response with your new ITIN still applies).

Those methods are: 

1. Physical Mail

The first option is simply to mail it yourself.

One of the benefits of Form W-7 is that you can mail it along with your tax return, allowing you to knock out two birds with one stone (at least, if you had planned to physically mail your return). 

In order for your form and return to be accepted, you’ll need to mail it along with proof identity, your tax return, and foreign status documents and send to this address:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

Keep in mind that it can take up to 14 weeks to receive your documents back from the IRS, which means you’ll want to use options #2 or #3 if you’ll need them during that window of time.

2. In Person Option 1: Certifying Acceptance Agent

A second option is to apply in-person with a Certifying Acceptance Agent. 

This is a good option for anyone who isn’t comfortable having to mail sensitive information such as your proof of identity and foreign status docs.

3. In Person Option 1: Taxpayer Assistance Center (by Appointment)

A final option is to make an appointment at an IRS Taxpayer Assistance Center. 

Again, this is also ideal for anyone who isn’t comfortable having to mail sensitive information.

There isn’t much difference between this and an Acceptance Agent, it’s more about what happens to be in your area. Both are viable in-person options. 

How to Check the Status of Your W-7 Application

You can call the IRS directly at 1-800-829-1040 to check the status of your application seven weeks after submitting. 

How Long Does It Take for the IRS to Process Form W-7

According to official IRS documentation here, the typical wait time to receive a response and obtain your ITIN is 7 weeks during normal periods and up to 11 weeks during peak season from January 15th – April 30th (i.e. tax season).

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What Is IRS Form 4506-T?

IRS Form 4506-T is an official IRS form used to request a tax return transcript.

Typically, Form 4506-T is used when you need to provide your tax return information for the purposes of:

• An IRS audit
• Applying for a mortgage loan
• Getting approved for a business loan
• Or verifying information from the previous year when filing your next tax return

So, how do you get a copy? Here’s how: 

How to Obtain Your Tax Transcript from the IRS

Fortunately, obtaining your tax transcript and related tax information is easier than ever.

While you can fill out Form 4506-T and wait for a response from the IRS, it’s no longer the fastest or easiest way.

Instead, you can create an IRS.gov tax account and log in within minutes.

Starting from IRS.gov, hover over the drop down menu under “File” and click “Get Your Tax Record”: 

Next, in true IRS fashion, instead of sending you straight to the portal where you can get your tax information, it sends you to another page.

Click on “Online Account”:

And another, click on “Sign in to your Online Account”: 

Lastly, click “ID.me – Create an account”:

You’ll have to submit official identification information, but by doing so you can get fast and convenient access to your official federal tax information.

This method is the fastest and most reliable, as it’s both quick as well as direct from the source. No other tool or service needs to be used to obtain your official tax information. 

To get all relevant tax transcript records, via the portal you’ll want to request a “Record of Account” for the most comprehensive individual tax records. 

Alternatively, you can send Form 4506-T to your local state IRS office or request a transcript by calling: 1-800-908-9946.

How to Fill Out IRS Form 4506-T (Step-By-Step Instructions)

Now, let’s go over how to fill out IRS Form 4506-T.

While it is a bit old-school to request your tax transcript through filling out a traditional Form 4506-T and sending it to the IRS, in some cases it may be your only option.

So, start by downloading the form via the IRS’s official Form 4506-T PDF link here then follow the below steps to fill it out: 

Step 1: Line 1b: Enter your EIN / SSN / TIN

On line 1b, enter your EIN if you’re requesting access to a business return:

If it’s a personal tax return, enter either your SSN or TIN, whichever is applicable to you. 

Step 2 (Line 3): Enter your address

One line 3, enter your complete current address, the address where you’d like to receive the copy of your transcript:

On line 4, enter your old address (the one you used to file your last return) if you’ve changed your address since your last filing.

Step 3: Sign and date

Lastly, make sure to sign and date Form 4506-T (same name as listed on line 1a):

Keep in mind that the date the IRS receives the form must be within 120 days of the date you write on the form when signing, otherwise they will reject it.

How Long Does It Take to Get Your Tax Transcript from the IRS?

According to official IRS documentation, the IRS takes 75 days to respond by mail with tax transcript documents.

However, fortunately the IRS now offers a way of obtaining your tax transcript and other information online. See the section above, “How to Obtain Your Tax Transcript from the IRS” to find out how.

Why Is My Lender Requesting Form 4506-T?

If you’re applying for a loan, in some cases, the lender may request Form 4506-T to obtain your tax information. 

The purpose for this is to verify income, typically as a secondary income verification source.

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Increasingly higher credit requirements, massive qualification hoops to jump through, and low approval odds has made obtaining traditional business funding harder than ever.

We’ve helped thousands of business owners obtain the capital they need to move their business forward, including flexible funding tools with low credit requirements and a simple and straightforward application.

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Your personal credit report acts as a gateway to your financial future.

Right now, your report may or may not be very promising. 

The good news is you’re in full control of what shows up on your credit report, so you ultimately decide that future. 

And with the right steps, you can open the way to the funding your business needs any time you need it.

But first, you need to obtain your credit report so that you know what you’re working with.

And that’s exactly what we’re going to help you with in this guide.

Below, we’ll cover:

• The single best– and only officially recognized– way to obtain your credit report (for free)
• How to read your credit report
• How your credit score is calculated
• Tips for cleaning up your credit report and improving your credit
• And how to obtain business funding no matter what condition your personal credit is currently in

Obtain a business loan even with bad credit. Apply to see if you’re approved today: Apply Now

How to Obtain Your Credit Report for Free (Only Officially Recognized Method)

By law, U.S. citizens are entitled to obtain their credit report for free, once from each of the three major credit bureaus every 12 months.

However, many credit monitoring services will mask this fact behind a paywall of credit monitoring.

While credit monitoring can be useful, you’re not required to pay for monitoring to obtain your credit report. 

According to the FTC.gov, only one website is officially authorized to provide U.S. citizens with a free credit report.

That site is AnnualCreditReport.com (annualcreditreport.com/index.action). 

This means you do not have to pay any company or service for access to your credit report. 

If you haven’t already obtained a copy of one of your credit reports (no matter from which credit bureau), it’s suggested you have that as we go through the rest of this guide. 

Having it on hand will allow you to make notes and mark it up with areas that need attention, whether that’s improvement, removal, or simply some research. 

So, if you haven’t yet, head to AnnualCreditReport.com to get a free copy of your credit report. 

How to Read Your Personal Credit Report

Your credit report is a collection of your financial data (such payment history, current debt) gathered by a credit bureau, typically one of the major bureaus in Experian, Equifax, or TransUnion. 

Access to your credit report can be requested by you or anyone you authorize to run your credit for the purpose of using your credit score and/or report to help grade your financial eligibility. 

The information on your credit report is separated into 4 major sections:

• Personal information
• Credit history
• Credit inquiries
• Public records

Personal information

This section includes basic information such as your name, address, and phone numbers:

Credit history

Credit history includes credit accounts, how much you owe (if anything), how long the account has been open (or closed), and whether you’ve ever been late on payments:

Credit inquiries

When you apply for credit, that company or lender will run a hard inquiry on your credit, which impacts your credit score immediately up to 1 year and lasts on your credit report for up to 2 years. 

Those inquiries appear on your credit report in the proceeding section, typically just after your accounts:

Public records

Finally, public records includes all assorted items such as judgments, liens, bankruptcies, and foreclosures

Once you understand how your report is structured and what is included in each section, it’s much easier to read through your report. 

However, there are some confusing terms that show up in credit reports you’ll want to know as well to make sure you understand everything that’s included in one of your credit reports.

A quick breakdown of all those confusing credit report terms

Here’s a quick breakdown of some of the most common terms that may appear on your credit report:

• Collection account: When a debt can’t be collected, large companies tend to sell that debt off to a debt collector. That account will show up as a collection account. 
• Charge-off: You might notice that some of your credit accounts say “Charged-off”. This means the creditor has given up on trying to collect the debt and written that debt off as a loss on their taxes. That debt may or may not have then been sold to a debt collector, so check to see if that same debt shows up as another account under a different name. 
• Open account: An open account includes any financial responsibility to which you pay off each month, such as a cell phone or utility bill. 
• Revolving account: This includes revolving credit accounts to which typically a portion of the balance is paid each month such as credit cards.

For a list of additional terms and codes that may appear on your credit report, several credit bureaus and other financial institutions offer handy guides, such as Creditfirm.net. 

How to Calculate Your Credit Score

Now that you understand how to read your personal credit report, let’s dive into your credit score. 

Your credit score is a direct reflection of the state of your credit report. 

If you learn what factors impact your credit score and how to read your credit report, you can put that knowledge together to vastly improve your credit. And you can do it often within a relatively short period of time. 

*Getting 9002 or 9003 credit when running your credit score? Find out what it means and what you can do about it. 

How you credit score is calculated

Credit agencies such as FICO and VantageScores take the data collected by the various bureaus to calculate your score. 

After calculating the data, they produce a score somewhere between 300 and 850 based on various factors, one score for each major credit bureau. 

It’s these agencies that calculate and produce your score, not the credit bureaus themselves. This is an important differentiation that’s critical to understand if you want to fully comprehend how your credit report and score work.

What factors impact your score? 

So then, how is your credit score calculated? 

There are 5 major items from your credit report that impact your score and these are the items you should be looking for when reviewing your credit report for possible improvements.

Below, we’ve organized those major factors in order of importance. The percentage (out of 100% total) indicates how important that particular factor is in calculating your score:

1. Payment history: 35%
2. Credit utilization: 30%
3. Credit history: 15%
4. Credit mix: 10%
5. New credit: 10%

Payment history: 35%

Easily the most important factor when it comes to calculating your credit score at 35% of your score, payment history accounts for just over ⅓ of your entire score’s calculation. 

This includes the number of on-time payments, late payments, and when those payments were made.

Suffice it to say, try to never be late on a payment. 

However, it’s also important to note that FICO and other agencies state a couple of late payments aren’t going to kill your score. 

It’s much more of a collection of factors taken together than any one thing dominating the scoring calculation. 

Credit utilization: 30%

The second of the two most important factors in calculating your credit score is credit utilization. Taken together, payment history and credit utilization account for 65% of your score 

Credit utilization takes into consideration the amount you owe, particularly what percentage of your available credit you’ve borrowed from. 

The less you’re borrowing from your available credit, the better your score.

For example, it’s generally advised to use no more than 20-30% of your available credit. If you have a $250 credit card, another $500 card, and a final card with a $1000 limit, your available credit is $1750. 

However, you should shoot for spending just $350-525 of that amount (the less the better). 

Credit history: 15%

Most notably, this takes into consideration the age of your credit accounts. 

The longer your accounts have been open, the better your credit score will be. However, this also accounts for how long you’ve been actively using those accounts.

Ideally, you should have multiple accounts open for a long period of time all which you’re also actively using, even if it’s only a small portion of the available credit.

Credit mix: 10%

Credit mix accounts for just 10% of your score’s calculation and it has to do with the combination of credit accounts you have on your report.

This one is a bit vague, but it’s generally suggested that a good mix of revolving and installment accounts of different types is best. 

The idea is that it indicates the borrower (you) can handle different types of credit, further increasing your credit score. 

New credit: 10%

New credit is the final element and it accounts for another 10% of your score.

This includes two different things: 

1. New inquiries
2. New credit accounts

First, soft inquiries don’t affect your credit. However, hard inquiries– such as when a car dealership or bank runs your credit for a loan– do impact your credit and stay on your credit report for up to 2 years. 

Second, opening several new accounts within a small window of time can also impact your score, as it can suggest that you’re in financial trouble. 

However, something else not often considered: opening new accounts lowers your average account age, which also impacts your credit history. 

4 Best Tips for Improving Your Credit

Now that we’ve covered what to look for on your credit report to start building toward a better credit score, we’ll cover some of our best tips for improving your credit.

Here are tips for improving your credit: 

1. Get credit monitoring

One of the single most important things you need to do if you’re serious about working on your credit is credit monitoring.

Credit monitoring, through sites such as Credit Karma, gives you a gateway into your credit activity. 

It will tell you not only when something has positively or negatively impacted your score, it will tell you when new items are added to your credit report, and help you identify credit fraud swiftly.

2. Remove old, erroneous, and fraudulent items

If you haven’t been keeping an eye on your credit report all this time, chances are that one or more items have landed on it that can be removed.

This includes items that: 

1. simply old and should have fallen off
2. Erroneous items such as credit accounts being listed twice, and
3. Fraudulent items you might never have noticed

Examples of items you might see and be able to remove from your credit report include a UCC filing or UCC lien, which often stay on your credit after they’ve expired and can easily be removed, tax liens, or judgments. 

Sometimes, companies will run your credit without your authorization. If you notice an inquiry you know you did not permit, you can request to have it removed.

Another example is a credit account which you’ve paid off or has been charged off, both of which can often be removed in some cases. 

3. Pay on time, no matter what

As we talked about earlier, your payment history accounts for ⅓ of your entire credit score. 

That means making sure that you’re paying on time is one of the single most important things you can do to improve and maintain your credit score. 

Don’t forget that if you’re having trouble paying something on time, you can call most companies and request an extension. Many industries offer up to 2 extensions a year (or more), which means you have flexibility if need-be. 

4. Optimize your credit utilization

Similarly, credit utilization is nearly ⅓ of your entire score. 

Many aren’t aware of the importance that credit utilization plays in terms of your credit score. And, if they are, many more aren’t aware of just how much of their credit they should be spending. 

Most sources will suggest you keep your credit utilization below 30%. This is technically true. However, if you keep it to under 20%, the difference is significant and it requires just a little extra self-restraint.

Alternatively, you can look into whether you’re available for a credit limit increase from any of your credit cards. 

Obtain the Funding Your Business Needs (Even without Great Credit) with Excel Capital

You credit is a gateway to some of life’s most important moments: your first (or next), a new home, or obtaining a business loan to get your business off the ground. 

Now that you have your credit report in hand, you might be wondering what your options are.

If you’re working on improving your credit, don’t let that hold you back from obtaining the cash your business needs to move forward.

At Excel Capital, we’ve helped thousands of business owners find the perfect funding solution for them.

We know that every business owner is at a different stage and a lack of accessible capital (or good credit to get that capital) shouldn’t be the reason your business doesn’t succeed.

We’ll work with you to identify the perfect option to fit your business– and your goals– no matter where you are in your credit-building journey.

Click below to apply:

Get the capital your business needs. Apply with Excel Capital today: Apply Now