Taxes for freelancers in the US: complete guide
Self-employed? Receiving 1099s? We break down self-employment tax, quarterly payments, and how to legally reduce your taxes.
Freelancing in the US and taxes
If you work as an independent contractor and receive a 1099-NEC, you are considered self-employed. That means a special tax regime.
Self-Employment Tax
On top of regular income tax, freelancers pay **self-employment tax — 15.3%** of net income:
Good news: half of SE tax is deductible from taxable income.
Estimated Tax (quarterly payments)
Freelancers are required to pay taxes **4 times a year**:
Skipping quarterly payments triggers an IRS underpayment penalty.
Business deductions
As a freelancer, you can deduct **all reasonable business expenses**:
SEP-IRA — a powerful tool
With a SEP-IRA you can contribute **up to 25% of net income** (max $70,000 in 2025) and deduct it from taxable income. It's one of the most effective ways for freelancers to cut taxes.
Takeaway
Freelancing in the US means freedom — and tax responsibility. Proper planning significantly reduces your tax burden.
Want to work through your situation? Book a consultation.
