Freelance Taxes in the USA: A Simplified Guide for Beginners

Are you a new freelancer in the United States and already dreading tax season? You’re not alone. Many beginners feel overwhelmed by IRS forms, self-employment tax, and all the rules that come with running your own business. The good news is that with a step-by-step approach, you can master your freelance taxes, avoid costly mistakes, and even save money. Let’s break it down together—no jargon, just the facts you need to succeed in 2025.

I’m Riten, founder of Fueler—a platform that helps freelancers and professionals get hired through their work samples. In this guide, I’ll walk you through everything you need to know about freelance taxes in the USA. Beyond mastering your craft, the real key is handling your business and presenting your work smartly. Your portfolio isn’t just a collection of projects—it’s your proof of skill, your credibility, and your shortcut to trust.

Who Is Considered a Freelancer or Self-Employed?

If you work for yourself, take on gigs, or run your own business, you are considered self-employed by the IRS. This includes full-time freelancers, part-timers, gig workers, and independent contractors. Understanding your status is the first step to filing correctly and staying compliant.

• You are self-employed if you run your own business or work as an independent contractor, even part-time
• You must file taxes if you earn $400 or more in net self-employment income per year
• You are responsible for both income tax and self-employment tax (Social Security and Medicare)
• You must track your own income and expenses throughout the year

Why it matters: Knowing your status ensures you file the right forms, pay the correct taxes, and avoid IRS penalties or confusion.

Key Tax Forms for Freelancers

Freelancers must use specific IRS forms to report their income and expenses. Organizing these forms early makes tax season much easier and helps you claim all your deductions.

• Form 1040 or 1040-SR: Main tax return form for individuals
• Schedule C (Form 1040): Reports profit or loss from your freelance business
• Schedule SE (Form 1040): Calculates self-employment tax (Social Security and Medicare)
• Form 1099-NEC: Reports nonemployee compensation if you earn $600+ from a client
• Form 1099-K: Reports payment card and third-party network transactions if you exceed $5,000
• Form W-9: Used to provide your taxpayer ID to clients

Why it matters: Using the correct forms keeps you compliant with IRS rules and ensures you accurately report income and claim deductions.

Understanding Self-Employment Tax

Freelancers pay a self-employment tax of 15.3%, which covers Social Security and Medicare. This is in addition to your regular income tax. It’s important to calculate and set aside this amount so you’re prepared at tax time.

• 12.4% for Social Security (up to $176,100 in 2025)
• 2.9% for Medicare (no cap), with an extra 0.9% for high earners
• Use Schedule SE to calculate and report this tax
• Self-employment tax is paid in addition to income tax

Tracking Income and Expenses

You must report all freelance income, even if you don’t receive a 1099 form. Keeping detailed records of your earnings and business expenses will help you claim deductions and reduce your taxable income.

• Track all payments from clients, platforms, and payment processors (PayPal, Stripe, etc.)
• Keep receipts for business expenses like office supplies, software, travel, phone bills, and advertising
• Use spreadsheets, accounting software, or mobile apps for organization
• Keep records for at least three years in case of an IRS audit

Why it matters: Accurate tracking helps you pay the right amount of tax, maximize your deductions, and stay stress-free at tax time.

Quarterly Estimated Tax Payments

Freelancers don’t have taxes withheld from their pay, so you must pay estimated taxes four times a year. Missing these payments can result in IRS penalties and interest charges.

• Estimated taxes are due in April, June, September, and January
• Use IRS Form 1040-ES to calculate and pay these taxes
• Base your payments on your expected income and deductions for the year
• Adjust payments if your income changes during the year

Why it matters: Paying quarterly keeps you in good standing with the IRS and makes your annual tax bill more manageable.

Common Deductions for Freelancers

Freelancers can deduct many business expenses to lower their taxable income. Knowing what you can deduct saves money and reduces your tax bill.

• Home office deduction: If you use part of your home exclusively for work
• Business travel, meals, and mileage: 70 cents per mile in 2025
• Equipment, software, and subscriptions: Laptops, cameras, editing tools, SaaS
• Education and certification costs: Courses, books, and seminars related to your business
• Health insurance premiums: If you’re self-employed and pay for your own coverage

Why it matters: Claiming all eligible deductions means you keep more of your hard-earned money and lower your overall tax burden.

Choosing Your Business Structure

Your business structure affects how you file taxes and what forms you use. Most freelancers start as sole proprietors, but forming an LLC or corporation can offer different tax benefits and legal protections.

• Sole proprietors: Use Schedule C with their personal tax return
• LLCs: Can choose how they are taxed (sole proprietor, partnership, or corporation)
• Corporations: File separate tax returns and may face double taxation
• S Corps: Allow certain tax advantages for qualifying freelancers

Why it matters: The right business structure can help you save on taxes, protect your personal assets, and make your freelance business look more professional to clients.

Staying Organized and Planning Ahead

Good tax planning reduces stress and helps you avoid last-minute problems. Staying organized throughout the year makes tax season much smoother.

• Set aside money for taxes from each payment you receive (aim for 25-30%)
• Use accounting software or apps to track income and expenses
• Review your finances monthly to spot issues early
• Keep digital and paper records organized for easy access

Why it matters: Being organized all year means fewer headaches, more accurate filings, and a healthier freelance business.

Filing Options for Freelancers

You can file your freelance taxes yourself or get professional help. Choose the option that fits your needs and comfort level.

• IRS Free File: For eligible taxpayers with simple returns
• Tax software: TurboTax, H&R Block, TaxAct, and others for easy e-filing
• Tax professionals: CPAs, enrolled agents, or accountants for complex situations
• Volunteer Income Tax Assistance (VITA): For those who qualify

Why it matters: Choosing the right filing method helps you file accurately and on time, reducing stress and avoiding costly errors.

Fueler: Helping Freelancers Get Hired and Stay Organized

Fueler is more than just a portfolio platform—it helps freelancers get noticed by US companies and stay organized. By showcasing your assignment-based work, you can attract better clients, collect testimonials, and keep your freelance business running smoothly.

• Build a professional, assignment-based portfolio to show real results
• Collect and display client feedback for trust and credibility
• Use templates to organize your projects and achievements
• Share your Fueler portfolio link with clients and on job platforms

Why it matters: Fueler helps you win more clients, boost your credibility, and stay on top of your business, so you can focus on your work—not just your taxes.

Final Thought

Freelance taxes in the USA may seem complicated at first, but with the right approach, you can manage them confidently. Know your tax status, use the correct forms, track your income and expenses, and claim every deduction you deserve. Stay organized, pay quarterly, and use reliable tools to keep your freelance business and taxes in top shape.

FAQs

1. What tax forms do freelancers need in the US?

You’ll need Form 1040, Schedule C, Schedule SE, and often Form 1099-NEC or 1099-K from clients and platforms.

2. How much is self-employment tax for US freelancers in 2025?

The self-employment tax rate is 15.3%, covering Social Security and Medicare, with an extra 0.9% Medicare tax for high earners.

3. What expenses can freelancers deduct on US taxes?

Common deductions include home office, business travel, equipment, software, and education costs directly related to your freelance work.

4. Do freelancers have to pay taxes quarterly in the US?

Yes, if you expect to owe $1,000 or more in taxes, you must make estimated payments four times a year to avoid penalties.

5. Should I use an accountant or tax software as a freelancer?

Both are good options. Accountants can help you avoid costly mistakes, while tax software can make filing easier and more affordable.

What is Fueler Portfolio?

Fueler is a career portfolio platform that helps companies find the best talents for their organization based on their proof of work.

You can create your portfolio on Fueler, thousands of freelancers around the world use Fueler to create their professional-looking portfolios and become financially independent. Discover inspiration for your portfolio

Sign up for free on Fueler or get in touch to learn more.