Taxes for Freelance Writers: How They Work, How to File Them, What Deductions to Take, and More

If you’ve ever held down a “traditional” job, whether it was a retail gig or a 9-to-5 office position, you know more or less how filing taxes works for most workers in the US.

How taxes work for traditional employees

Here’s how taxes usually work. Your employer withholds a portion of your income to pay for some of your taxes; they also provide you with a form, called a W-2, which contains important information, such as how much you earned and how much they withheld.

You then use that info to fill out something called a Form 1040, which you submit to the IRS (along with your actual payment) when tax season comes around each year.

How taxes work for freelancers

Taxes for freelancers don’t work that way. As a freelance writer, the IRS considers you “self-employed,” which means your taxes have several important differences:

• There’s no withholding: Since you don’t have an employer (you have clients), no one will withhold part of your income for you. You’ll be responsible for 100% of your own taxes.
• You’ll use different forms: Instead of getting a W-2 from your employer, you may receive something called a 1099-NEC or 1099-K from your clients, although not necessarily from all of them.
• Taxes are quarterly: Instead of filing once per year, you have to file four times.

That’s a brief summary. We’ll elaborate on all of these differences when we cover the nuts-and-bolts process of actually filing your taxes below.

As a freelancer, you’ll owe both:

• A “self-employment tax”
• Federal and/or state income taxes

Demystifying the self-employment tax

All freelancers who male more than $400 in a year must pay 15.3% of their incomes to support Social Security and Medicare. This is referred to as the self-employment tax. 1

All workers actually pay this tax; the difference is that most of them share the burden with their employers. Per the Federal Insurance Contributions Act (FICA), workers must contribute 7.65% of their incomes to these two programs (companies withhold part of each employee’s paycheck to pay this). Employers match their contributions for a total of 15.3%.

Since you’re self-employed, you’re responsible for the full 15.3% yourself. It’ll have to come out of your profits (i.e., what your clients pay you). You’ll need to budget for this, since, again, your clients won’t withhold any of your pay.

That might be a hard pill to swallow, but there is a bright side. You can claim back half of your self-employment tax as a deduction from your income tax, something that we’ll elaborate on near the end of this article.

Demystifying your income tax

Freelance writers also need to pay federal income taxes, just like most other workers in the US.

How much you owe is determined entirely by how much you make—in other words, what tax bracket you’re in. The higher your income, the more you have to pay.

Note that this doesn’t mean that getting paid more means taking home less money, which is a common misconception. If you earn more and it bumps you into a higher tax bracket, you’ll only pay the higher rate on the income that exceeds that threshold.

Put another way: In 2023, the tax rate on earned income from $0 to $11,000 was 10%, and the rate on income from $11,001 to $44,725 was 12%. 2 If you made $20,000 in 2023, the first $11,000 you earned would have still been taxed at 10%. Only the remaining $9,000 would have been taxed at 12%.

The bottom line is that whether you’re a freelancer or an employee, earning more money is always a good thing, even if part of it gets taxed at a higher rate.

State income taxes

In addition to your federal income tax, you may also need to pay a state income tax. Not all states collect this, but 41 of them do.

This will obviously vary greatly depending on where you live. The rest of this article will focus on federal taxes, but you can get more information on your state taxes (both how much you owe and how to file) by clicking your state on this interactive taxation map.

Now that we’ve covered the differences in tax collection between 9-to-5 workers and freelance writers, we’ll get into the details and talk about the actual process you have to follow to file your taxes.

When do you have to file your taxes as a freelancer?

As mentioned, when you’re a freelancer, you don’t just pay your taxes once per year; you pay them in four quarterly installments. The purpose of this is to avoid hitting people with an overwhelming tax burden at any one time (since realistically, many people will fail to budget for it, which makes things harder on both them and the IRS).

The table below shows the quarterly deadlines for 2024. Bear in mind that these deadlines sometimes vary from state to state and may be subject to change or extension; double check the deadline for your state for the most accurate information.

Freelancer Tax Deadlines in 2024

What forms do you need to file your taxes as a freelance writer?

When one of those deadlines starts creeping up on you, it’s important to make sure you have all the paperwork you need to file your taxes. There are two classes of forms you need to worry about:

1. 1099 forms

As a freelancer, you may receive 1099 forms from your clients. These are forms that report “nonemployee compensation”—in other words, money that someone paid you for freelance or independent work.

Again, these aren’t forms that you have to file. They’re forms that you receive to help you track your income. There are three types you may be sent:

• 1099-NEC: Your clients are legally required to provide you with this form if they directly paid you $600 or more for the year. If they paid you less than that, they don’t have to provide a form to help you track your income. You’ll still owe taxes on the money they paid you; you’ll just have to track it yourself.
• 1099-K: Clients also don’t have to send you a 1099-NEC if they paid you through an electronic platform (such as PayPal) or an online marketplace (such as Upwork). Instead, you’ll receive a separate form, called a 1099-K, directly from the platform in question, but only if you earned more than $20,000 and had at least 200 separate transactions (e.g., payments).
• 1099-MISC: This is a third (rarer) type of 1099 form that you’ll only receive if you received royalties (e.g., for a book that you wrote and published).

The upshot is that you may receive 1099 reports on how much you earned from various sources, but you can’t necessarily count on that.

It’s worth noting that even if you’re owed a 1099 form, the company might forget to issue it. That isn’t supposed to happen, but many freelance writers report that they sometimes fall through the cracks.

This means that it’s always necessary to keep track of how much you earned. You can use 1099s to double check your work, but don’t rely on them. Maintain your own records as well.

2. 1040 and Schedule C forms

More importantly, you need to know about the forms you use to actually file your taxes. These are called 1040 forms, and they come in several varieties. The one you need is called 1040-ES, which is distinct from the others in that it’s meant for quarterly filing, whereas the others are annual.

You also need to fill out and attach separate forms to the main one (yes, we know, and yes, we’re sorry). These are called “schedules.” The two that you have to worry about are:

• Schedule C: You’ll use this to report the income you earned from your freelance writing side hustle or business, as well as your business expenses.
• Schedule SE: This is the form you use to calculate and report the self-employment tax we discussed above. As mentioned, you need to pay this if your total freelance income was at least $400.

These three forms may feel somewhat redundant with each other, but unfortunately, you have to fill out and submit all of them to keep the IRS happy (and to claim all the tax deductions you’re entitled to).

Putting it all together: how to pay your taxes each quarter in 6 simple steps

We’ve hit you with a lot of forms and a lot of jargon. Here are the key takeaways from all of this—in other words, the actual process you need to follow to pay your taxes as a freelance writer.

1. You need to continuously track your earnings (and expenses). To help you do this, many of your clients (and the electronic payment platforms you use) may send you 1099 forms, but only if your income exceeds a certain level.
2. You need to pay your taxes four times per year, in April, June, September, and January.
3. When each tax reason rolls around, you need to download three forms from the IRS’s website: 1040-ES, Schedule C, and Schedule SE.
4. Fill these out using your records of your income and expenses, following the instructions that the IRS provides with the forms.
5. Once you’re done, double check the forms, making sure you’ve taken all the deductions you’re entitled to.
6. Send the forms (along with your actual payment) to the IRS via mail, by submitting an online payment, or via the IRS’s mobile app (IRS2Go).

That’s really all there is to it. The whole process is arguably more confusing and intimidating than it really should be, with a lot of jargon to learn and a lot of forms to keep track of, but at its heart, it isn’t that complicated.

We’ve gone over how to pay your taxes as a freelancer. Next up is everybody’s favorite part: how to not pay your taxes as a freelancer.

While freelance writers do have a relatively high tax burden, they’re also able to enjoy some fairly attractive tax write-offs (known as deductions). Make sure you claim these. Otherwise, you’re leaving money on the table.

Self-employment tax deduction

As we mentioned above, while you have to fork over 15.3% of your earnings to pay your self-employment tax, you’re able to claim back half of that as a deduction on your federal income tax.

Effectively, this equalizes things between freelancers and traditional workers (who only have to pay 7.65% to begin with).

Business expense tax write-offs

Freelance writers tend to overlook their business expenses. That’s easy to do, given that writing isn’t a side hustle that usually has much equipment or overhead, but there are still costs associated with being a professional writer.

If you have any of the following expenses, you can deduct them from your taxes:

• The cost of buying a new computer or laptop (for professional use)
• Paid subscriptions for writing software, like Grammarly
• Website hosting and domain name registration expenses
• Continuing education courses (such as MasterClass courses)
• Dues for membership in professional associations
• Travel expenses for conferences or other professional events
• The price of any research materials or reference books you buy
• Business lunches or meals in meetings
• Money used to renovate or refurbish your home office

The key is that you can only deduct legitimate business expenses.

For instance, if you want a new laptop for your personal use, you can’t write it off just because you also plan on occasionally using it for freelance writing assignments. (Don’t lie and claim personal property as business property—that’s tax fraud.)

It’s a good idea to keep your personal property as separate from the equipment you use for your freelance writing gig as possible. This will make your life much easier and potentially enable you to claim more deductions when it comes time to file your taxes.

Home office deduction

Remote, home-based freelance writers can also take advantage of the home office deduction. If you use part of your home to conduct business, you can deduct certain expenses, including:

• Mortgage and insurance payments
• Utility bills
• Repairs
• Depreciation

To do this, you’ll need to figure out what percentage of your house your home office takes up. It probably goes without saying that the IRS won’t let you claim your entire mortgage as a deduction. You can only take the portion that’s essentially paying for office space.

Keep in mind that, to take advantage of this deduction, the space in your home must be used exclusively for business. In other words, if your kitchen table is your primary workspace, it doesn’t count because it usually serves another purpose.

Similarly, if you regularly use your home office to watch movies (and you don’t happen to be a freelance movie reviewer), it’s no longer exclusively a workspace.

Obviously, the IRS probably won’t find out about it if you’re less-than-disciplined about this, but it’s still best to be fully compliant.

Retirement fund contributions

If you’re looking for a way to deduct more from your taxable income, you can contribute to a retirement fund. Any contributions you make to a traditional IRA or a solo 401(k) fund are tax deductible.

Notably, both of these accounts have counterparts, the Roth IRA and Roth solo 401(k). Contributions to these are not tax deductible, but later down the line, when you actually retire, withdrawals from them will be tax-free (in contrast to traditional IRAs, which are subject to taxes on withdrawals).

Which type of retirement fund should you pick as a freelance writer?

Putting away some of your earnings for retirement is a great choice, but which of these options you should opt for is heavily affected by your current financial situation, as well as what you expect it to be in retirement.

Comprehensively covering all of that is outside the scope of this article, but be aware that the best choice isn’t necessarily the one that will result in the lowest tax burden in the here and now.

Spend some time reading up on how saving for retirement as a freelancer works and make your choice after weighing your current income against what you expect it to be after you retire.