How to Pay Tax as a Freelancer? – Complete Guide

How do freelancers pay tax
We may receive compensation from the below providers if you purchase through the links provided. 
Read more here

Many people are switching to a new model of work. They prefer working as freelancers instead of being on the payroll as a traditional employee.

Freelancing has many advantages. It gives you freedom, and you get to be your own boss, have more control over the working hours, the projects you take on, and how you complete those projects.

But the story is a bit different when it comes to taxes. Being a freelancer, you may wonder what kind of tax rules apply to your income. How do you file? When to file? And do you even have to pay taxes on it at all?

The answer to all these questions depends on how much you earn as a freelancer. If your income is at least $400 through your freelance business, you are bound to pay an additional self-employment tax. So, let’s learn how all these things work.

Freelance Taxes

Being a freelancer, you need to be aware of two main tax charges.

  • Regular income tax – whether you are self-employed or working for a company, you pay this in both cases. The percentage you pay depends on your income.
  • Self-employment tax – you also must pay 15.3% of self-employment tax, meant to cover your Medicare and social security. As a freelancer, you are your own boss and employer. So, you need to pay taxes that reflect that.

Set aside money for taxes

Freelancers should set aside money from earning from every freelance project. Don’t wait until the end of the year; you might have spent the money that the Internal Revenue Service (IRS) wants.

Generally, freelancers save 25-30% of every check for taxes. If you’re a resident of a country where income tax exists, then your state taxes must be factored in as well.

Many freelancers tend to have separate savings accounts only for taxes. It

When to file your freelance taxes?

Freelancers pay their taxes on the same day in April as everyone else. However, since freelancers don’t work as a regular employee and don’t have an employer to withhold a small chunk of their paycheck for taxes, the IRS gives an option of paying quarterly estimates of what you think you will owe. Whatever amount you expect to owe, the IRS requires you to pay that amount.

Check the below chart to find out the due dates for your quarterly estimated taxes. Remember that you will owe more money at the end of the tax year if your estimates are lower. Similarly, you will get extra money in your tax refund if your estimates were higher.

Payment PeriodDue Date
January 1 through March 31April 15
April 1 through May 31June 15
June 1 through August 31September 15
September 1 through December 31January 15 of the following year

Tax forms for freelancers

The main form needed by freelancers is the 1099-MISC form. Being a freelancer, you need to worry about it and whenever a client pays you more than $400 during a tax year, make sure to get this form from that client. All your 1099 forms are significant in terms of filing taxes as a freelancer.

You’ll also need Schedule C and the self-employment schedule of Form 1040, so it’s better to formalize yourself with it. People running their own businesses or sole proprietors need this form.

How to claim your tax deductions

Many freelancers don’t know about tax deductions. That’s why they don’t claim any deductions when they could be saving money by doing so. It is super easy; you need to itemize your business expenses, and by decreasing your taxable income and by doing so, you’ll end up owing less in taxes. Make sure to keep a record of your income and expenses. It’ll work as a reference when it’s time to itemize.

There are plenty of expenses you can deduct, such as housing expenses if you use part of your home for business. Home office deduction applies to all types of homes, and any homeowner or renter can avail of it.

The IRS is very strict about deducting expenses, so it’s better to consult with a tax professional before claiming your tax deductions.

Other expenses you need to remember

Don’t forget about other big expenses when you set aside money for taxes. Other expenses, such as car insurance and health insurance, can take you by surprise. As I mentioned above, it is always better to keep your tax money in a saving account but similarly never neglect your emergency fund.

There is no such thing as paid time off in freelancing. You can stay out of debt by maintaining your emergency fund. It will enable you to cover all other expenses.

Side Gig Taxes

If you work a side job in addition to your primary job to increase your income, you can’t count on your jobs W2 withholdings to cover your taxes. Still, you need to set aside money from your side job checks to cover your taxes.

Consult with professionals

It is good to do research and keep yourself updated, but as a freelancer, you might not have enough time to manage all these things, so it is better to use a reputable CPA and follow their advice. You may not be aware of certain deductions and rules which can lead you to a disastrous situation. Accountants, on the other hand, can save you time and money.


Freelancing has its benefits, but complications exist when it comes to taxation. The IRS considers freelancers as self-employed, which means you are bound to pay your taxes. Although you can avail of additional deductions if you’re self-employed, you’ll also need to pay additional taxes called a self-employment tax.

Always maintain a record of all the checks you received from your client, especially those who paid you more than $400. Saving an account can do wonders, so create one today. If you’re dealing with foreign clients, you should consult a tax professional to fill specialized tax forms.

About the Author

Skip to


Related Articles

How to Use GPT-3 in OpenAI Playground
5 Ways You Can Showcase Your Freelance Services Online
Freelance Pricing 101: The Ultimate Guide on How to Price Yourself
Accounting 101: For Freelancers and Self-Employed
How to Negotiate as a Freelancer [3 Sample Email Templates Included]
Freelancing Red Flags
5 Most Common Client Red Flags in Freelancing
Best PayPal Alternatives for Freelance Payments
Best PayPal Alternatives For Freelance Payments
How to become successful in freelancing
How To Be Successful in Freelancing? 7 Highly Useful Tips
Easy Online Part-Time Jobs
10 Easy Online Part-Time Jobs to Enjoy Self-Earned Money
Freelancers Visa - Best Countries to Work as a Freelancer
Freelancer Visa: Best Countries to Work as A freelancer
Why Personal Branding for Freelancers Is Important
Why Is Personal Branding Important for Freelancers like You?
Best Freelance Jobs For College dropouts
The Best Freelance Jobs For College Students
Co Working Space vs Traditional Office
Coworking vs Traditional Office Spaces – Choose Perfect Option that Fits
History of CoWorking Spaces
History of Coworking Space: The Complete Timeline for New Startups
Concept of Hot Desking
Hot Desking: All You Need to Know
Best SEO platforms
Best SEO Platforms in 2022
Canva Transparent Background Guide
How to Create a Transparent Background With Canva
How to become a content writer with no experience
How to Become a Freelance Writer with No Experience?
Best AI Content Tools for Freelancers
The Best AI Content Tools for Freelancers
Images in Webflow
A Guide to Working With Images in Webflow – Webflow Images
Most Frequently Asked Questions About Canva
Canva: The Guide to Frequently Asked Questions
Tips for Better Mental Health for Remote Freelancers & Workers
How To Take Care Of Your Mental Health While Working Remotely
Can You Use Canva Pro Images for Commercial Use
Can You Use Canva Pro Images for Commercial Use? An Honest Guide
How to Use Duda for Website Building
How to Use Duda Website Builder
SemRush For Keyword Research
How to Use Semrush for Keyword Research
How To Make Money On UpWork
How to Make Money on Upwork – Complete Guide
How To Write UpWork Proposal
How to Write an Upwork Proposal To Win High Paying Clients
How To Work On Fiverr
How To Work On Fiverr To Make Six Figure Income
How To Get Jobs On UpWork
How To Get Jobs On UpWork That Value Your Time And Worth?
Duda Alternatives
The 4 Best Duda Alternatives in 2022
reasons to use clickup
10 Reasons to Use ClickUp for Team Management
Webflow Alternatives
Webflow Alternatives: Business Site Options at Your Fingertips
Effective Tips to Promote Fiverr Gigs
How to Promote Fiverr Gigs & Services?
Self-care strategies for Freelancers
5 Practical Self-Care Strategies for Freelancers
Freelancing vs Full-time Jobs
Freelancing Vs Full-Time Job – What to Choose?
High Paying Freelancing Skills
9 High-Paying Freelancing Skills in 2021
Developer Tools for Productivity
10 Best Developer Tools To Increase Your Productivity In 2021
Tips to Manage Money as a Freelancer
How to Manage Your Money As a Freelancer
7 crucial things to know before you start freelancing
7 Crucial Things to Know Before You Start Freelancing
freelance skills that you can start learning today
Top 10 Freelance Skills You Can Start Learning Today
7 Ways to Discover Whether A Freelancing Career Is Right For You
7 Ways to Discover Whether A Freelancing Career Is Right For You?
5 Reasons Why Digital Freelancing is the Future of Work
5 Reasons Why Digital Freelancing is the Future of Work
10 Powerful Tips on How To Use LinkedIn To Earn Clients
10 Powerful Tips on How To Use LinkedIn To Earn Clients
Ahrefs Best Alternatives
Ahrefs Best Alternatives – Key Features & More
Manage Finance & Accounting of Your Remote Based Business
How to Manage Your Remote Based Business Finance & Accounting
Freelance vs Self Employed - What type of worker are you
Freelance vs Self-Employed – Which Type Of Worker Are You?
advices and tips to overcome remote work challenges
How to Overcome Remote Work Challenges – Actionable Tips
Pros and Cons of Freelancing to Consider
10 Pros and Cons of Freelancing to Consider
Cybersecurity tips for Remote Workers
Ensure Cybersecurity When Working Remotely or From Home
Becoming a Successful Remote Freelancer
How to Become a Successful Remote Freelancer?
productivity tips for working from home
8 Work from Home Productivity Tips
tips for becoming a great podcast guest
How to Be a Great Podcast Guest
Tips for Branding Yourself as SEO Freelancer
How Do I Brand Myself as SEO Freelancer
How to become a Podcast Guest
How to Become a Podcast Guest
How Much Do Freelance Video Editors Make?
How Much Do Freelance Video Editors Make
How to brand yourself as a developer
5 Effective Tips on How to Brand Yourself as a Developer
What is Freelance Video Editing
What is Freelance Video Editing & How to Earn From It
Brand Yourself As Freelancer
How Do I Brand Myself as a Freelancer? Step-by-Step Guide
How much do freelancers earn
How Much Money Can Be Made From Freelancing?
In Demand Freelancing Skills in 2021
Which Freelancing Skills Are In-Demand for 2021
Which Platform is Best for Freelancers -
Which Platform is Best for Freelancers?
How to become a Freelancer with No experience
How Can I Become a Freelancer with No Experience?
Can Freelancing be a Career -
Can Freelancing be a Career?
How to get a freelancing job without experience -
9 Tips to Get Freelancing Job Without Experience as a Beginner
BEST free design tools everything freelance
5 Best Free Design Tools You’ll Ever Need
3 Core Advantages of Cloud Computing for Remote Workers
3 Major Advantages of Cloud Computing for Remote Workers
Android Apps to Improve Your Company Management
4 Android Apps To Improve Your Company Management
How to get clients for a New Business
How to Get Clients for A New Business?
How to get ecommerce clients
How to Get E-commerce Clients
How to get a client to pay their bills
How to Get a Client to Pay their Bill
Types of Difficult Clients
Types of Difficult Clients and Effective Ways to Handle Them
Best Visual Collaboration Tools for Remote Work
Best Visual Collaboration Tools for Remote Work
Best Freelance Management Platforms
Best Freelance Management Platforms for 2021
Online Collaboration Tools for Remote Workers
Best Online Collaboration Tools for Remote Workers
How to get clients as a Freelancer
How to Get Clients As A Freelancer
Create Automation in Mailchimp
How to Create Automation Using Mailchimp?
Alternatives for Toggl
What Are the Best Alternatives to Toggl
Best apps for Freelancers
Best 8 Apps for Freelancers
Health Insurance for Freelancers
Best Health Insurance for Freelancer
How to create an Invoice on PayPal
How to Create an Invoice on Paypal