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:
- 12.4% — Social Security
- 2.9% — Medicare
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:
- April 15 — for January–March
- June 16 — for April–May
- September 15 — for June–August
- January 15 — for September–December
Skipping quarterly payments triggers an IRS underpayment penalty.
Business deductions
As a freelancer, you can deduct all reasonable business expenses:
- Home office deduction
- Computer, phone, equipment
- Internet and phone service
- Software and subscriptions
- Professional education
- Self-employed health insurance
- Retirement contributions (SEP-IRA, Solo 401k)
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.
