Tax for Freelancers USA: Complete 2026 Guide

As a freelancer in the US, you pay: • Self-employment tax: 15.3% (12.4% Social Security + 2.9% Medicare) • Federal income tax: 10-37% depending on bracket • State income tax: 0-13.3% depending on state

Self-employment tax applies to net earnings over $400. You can deduct 50% of self-employment tax from your adjusted gross income.

Unlike employees with withholding, freelancers must make quarterly estimated tax payments: • Q1: April 15 • Q2: June 15 • Q3: September 15 • Q4: January 15 (next year)

Use Form 1040-ES to calculate and pay. Missing payments triggers an underpayment penalty.

Common freelancer deductions: • Home office (simplified method: $5/sq ft, up to 300 sq ft) • Health insurance premiums (100% deductible) • Equipment and software • Professional development • Travel and meals (50% for meals) • Vehicle expenses (standard mileage: 67¢/mile in 2026) • Retirement contributions (SEP-IRA, Solo 401k) • Internet and phone (business percentage)

Options: • Sole proprietorship: simplest, report on Schedule C • Single-member LLC: liability protection, same tax treatment as sole prop • S-Corp election: can save self-employment tax if salary vs distribution is reasonable

Consider S-Corp election when net profit exceeds ~$60,000/year.