Quarterly Tax Tips For Freelancers And Self-Employed

Tax season is just around the corner. For freelancers and self-employed professionals, the mere thought of preparing feels like an uphill battle.

Without the structure of a traditional workplace, managing taxes often means juggling multiple income streams, tracking expenses, and staying ahead of deadlines—all while focusing on your work. But don’t stress.

Here are quarterly tax tips for freelancers and self-employed to help you stay organized and maximize your deductions.

The IRS defines self-employment as operating a trade or business as a sole proprietor, independent contractor, partner, or gig worker. Self-employed individuals earning $400 or more annually from a single source must file taxes, including a 15.3% self-employment tax covering Social Security and Medicare. This is in addition to standard income taxes based on your tax bracket and filing status. 

Freelancers should calculate estimated tax payments based on quarterly earnings. Set aside a portion of each payment, accounting for your anticipated tax rate and self-employment tax, to cover these obligations.

Calculate your net profit or loss by subtracting business expenses from income to determine self-employment tax and income tax. A net profit is taxable income, while a net loss can typically reduce gross income on Form 1040 or 1040-SR, though loss deductions may have limitations.

There’s also Form 1099-K, an IRS reporting document sent by third-party payment platforms like Venmo, PayPal, Stripe, and Cash App. Previously, if you made over $600 on these apps, they would report it. This year, the IRS raised the 1099-K reporting threshold to $5,000 or greater.

“I recommend starting with the basics and understanding what forms you need to file based on your income, expenses, and any particular circumstances,” said Dana Ronald, president of the Tax Crisis Institute, in an interview with CNET. “The IRS has free resources for taxpayers of all ages, including online tools, publications, and workshops.”

If you earned $79,000 or less in 2024 and plan to file a straightforward tax return — without itemized deductions or income from a side hustle — you likely qualify for the IRS free file.

Don’t qualify? Check out low-cost filing sites like FreeTaxUSA, Credit Karma, CashAppTaxes, or TaxSlayer.TurboTax and H&R Block.

“Filing your own taxes means keeping track of all your receipts and statements and understanding what it all means,” said Josh Zimmelman, owner of Westwood Tax & Consulting, in an interview with Business News Daily. “Every transaction matters, and if your financials are kind of a mess, then you’re better off paying someone else to sort it out for you.”

Another quarterly tax tips for freelancers and self-employed is to get professional help. To find a certified public accountant (CPA), verify their credentials through your state’s Board of Accountancy, CPA Verify, or the IRS Treasury. Ensure they specialize in areas relevant to your needs, such as freelance income, small business taxes, or personal financial planning. A CPA familiar with unique tax issues can be especially valuable for freelancers.

Check their reputation by reading reviews or asking for referrals. Personal recommendations often lead to trustworthy professionals. Membership in organizations like the American Institute of CPAs can also indicate high ethical and professional standards.

Assess their communication style and availability. A responsive CPA who communicates clearly is essential, especially during tax season. Clarify their fee structure to ensure it fits your budget, as some charge hourly while others offer flat rates.

Using your home for work? Consider the home office deduction to reduce taxes by claiming your dedicated workspace as a business expense.Other deductions include equipment and software, internet and phone costs, travel and transportation and business-related meals, professional development such as taking courses or getting certifications directly related to the business profession, marketing, insurance, subscriptions, and professional fees.