What are my tax obligations as a freelancer?

What are my tax obligations as a freelancer?

As a freelancer, you are typically required to pay self-employment tax, income tax, and possibly state taxes. It's important to keep track of your income and expenses.

How do I calculate my self-employment tax?

To calculate your self-employment tax, you'll need to determine your net earnings from self-employment, which is usually 92.35% of your gross income. Then, apply the self-employment tax rate of 15.3%.

Can I deduct business expenses from my taxes?

Yes, you can deduct ordinary and necessary business expenses from your taxable income. This includes costs like supplies, software, and home office expenses.

What forms do I need to file?

Freelancers typically need to file a Schedule C (Form 1040) to report income and expenses, and Schedule SE for self-employment tax.

Are there any tax credits available for freelancers?

Yes, freelancers may qualify for various tax credits, such as the Earned Income Tax Credit or the Lifetime Learning Credit, depending on their situation.