Taxes can feel overwhelming, even when you aren’t a freelancer. But as a self-employed writer, the better you understand your taxes (and the sooner you prepare), the easier life gets when April rolls around.
Rachel Meltzer
Quick disclaimer: I’m not a tax expert. This blog isn’t tax, legal, or financial advice — it’s simply what I’ve learned while setting up my own freelance writing business. If you have questions about your specific situation, talk to a real tax professional.
Now that we’ve got that out of the way — taxes can feel overwhelming, even when you aren’t a freelancer. But as a self-employed writer, the better you understand your taxes (and the sooner you prepare), the easier life gets when April rolls around.
This isn’t everything you’ll ever need to know — but it is a crash course to help you get started. Let’s make taxes less terrifying, one tip at a time.
5 Tax Basics Every Freelance Writer Should Know
1. How Much Should I Set Aside for Taxes?
Every single time you get paid — whether it’s $50 or $5,000 — set aside 20–30% of that income for taxes.
Why? Because as a freelancer, you’re responsible for self-employment taxes (around 15.3% total: 12.4% Social Security + 2.9% Medicare) and your state taxes, which vary but often average around 15%.
You may not end up needing that whole amount, but you will be glad you saved it when tax season hits.
2. Sole Proprietor vs. LLC: What’s the Difference for Freelancers?
Sole Proprietor
A sole proprietorship is the default setup when you start freelancing — no extra paperwork required. You’re entitled to 100% of your profit but also responsible for 100% of the risk and debt.
Tip: Get an EIN (Employer Identification Number) — basically a Social Security number for your business — for free from the IRS. It adds a layer of protection and keeps your SSN private.
LLC (Limited Liability Company)
An LLC is a simple legal structure that gives you limited liability — meaning your personal assets (car, house, savings) are better protected if your business is sued or can’t pay debts.
Cost: Filing fees range from $40–$500, depending on your state.
Tax Note: A Sole Proprietorship and an LLC are taxed the same way — unless you elect to become an S-Corp.
S-Corp status allows you to pay yourself a salary and potentially lower your self-employment taxes. But it also comes with more admin: separate accounts, payroll, bookkeeping. If you go this route, keep business and personal finances 100% separate and talk to a CPA.
3. Do I Need to Pay Quarterly Taxes?
First year? Probably not. But after that, yes.
If you owe $1,000 or more per quarter, the IRS expects you to pay quarterly estimated taxes.
If you skip them, you’ll owe a small penalty — usually under $100 — but if you habitually underpay, those fees add up fast.
If you know you struggle to save, you can send $1,000/quarter straight to the IRS so you’re not tempted to spend it elsewhere.
4. What If I Can’t Pay My Taxes in Full?
Don’t panic — the IRS has payment plans.
- Short-term plan: Pay in 90–180 days — no interest.
- Long-term plan: Pay monthly — but you’ll owe interest.
Important: File on time anyway. Even if you can’t pay the full amount, you can pay any amount toward your total — no strict payment schedule required.
5. Should I Get an EIN?
Short answer? Yes.
An EIN (Employer Identification Number) is free to get from the IRS and only takes a few minutes.
Benefits:
- Keeps your Social Security number private
- Required if you ever hire W-2 employees, form an LLC, or open a solo 401(k)
- Helps protect against identity theft
- Needed for some business bank accounts or funding
Try This:
Taxes are due April 18th — don’t wait!
Here’s how to make tax season less terrible:
1. Block 2–3 hours on your calendar to get it done
2. Gather your paperwork:
- Bookkeeping software/spreadsheets/notebooks
- 1099s
- 1095-A form (if you have Marketplace insurance)
- EIN info
- Banking info
- Your tax prep software or CPA contact
3. Log in to TurboTax (or hire help — worth every penny)
4. File your taxes or set up a payment plan
5. Pour yourself a drink — you did it!
FAQ’s About Freelance Writer Taxes
Q: Do I really need to save 30% of every payment?
A: Yes — it’s safer than under-saving. You might get some back if you have business write-offs or lower income, but over-preparing = less stress later.
Q: What’s the benefit of an LLC if taxes are the same?
A: Protection. An LLC can shield your personal assets if someone sues you or you default on business debt.
Q: Can I switch from Sole Prop to LLC later?
A: Absolutely. Many freelancers start as Sole Props and file as LLCs once they grow or want more protection.
Q: Do I have to pay quarterly taxes forever?
A: Yes — if you consistently owe more than $1,000 per quarter, you’ll need to pay estimated taxes every year.
Q: Do I need an accountant?
A: Not required — but if taxes stress you out, a CPA is worth it. Even using a TurboTax expert can make tax season way easier.
Quick Disclaimer Again
This blog is not tax advice. Always check with a licensed tax professional for guidance on your unique situation.
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