If you freelance in the US, the IRS says you generally have to file an income tax return when your net earnings from self-employment were $400 or more. You also owe self-employment tax of 15.3%, which covers Social Security and Medicare, and you usually pay estimated tax every quarter if you expect to owe $1,000 or more. This is general information, not tax advice.
Do I have to file taxes as a freelancer?
Most likely yes. The IRS Self-Employed Individuals Tax Center says you have to file an income tax return if your net earnings from self-employment were $400 or more. “Net” means what is left after your business expenses, not what clients paid you.
Your business profit or loss goes on Schedule C, which attaches to your Form 1040. That is true whether your income comes from writing, design, video editing, user-generated content or other client work. If you want to see how one type of freelance work is paid, our guide to what a UGC creator is shows a common example.
What is self-employment tax?
Self-employment tax is how freelancers pay Social Security and Medicare, which an employer would normally split with an employee. The IRS gives the rate as 15.3%: 12.4% for Social Security and 2.9% for Medicare. It is separate from income tax.
You calculate it on Schedule SE. The IRS says you must pay it and file Schedule SE when your net earnings from self-employment were $400 or more. The agency also notes you can deduct the employer-equivalent portion of the tax when figuring adjusted gross income, and that this deduction affects income tax only, not the self-employment tax itself.
The Social Security part has an annual earnings cap that changes by year. The IRS page we reviewed lists a figure for 2024, so check the current cap before you plan.
Do I need to pay taxes quarterly?
Probably. Nobody withholds tax from a freelance payment, so the IRS expects you to pay during the year. According to its estimated taxes page, individuals generally must pay estimated tax if they expect to owe $1,000 or more when they file. The year is divided into four payment periods, each with its own due date. If a due date lands on a weekend or holiday, paying the next regular day counts as on time.
You can pay by mail with Form 1040-ES, online, by phone or through the IRS app, or through your IRS online account. To figure out whether and how much you owe, the Form 1040-ES worksheet is the IRS tool.
You can generally avoid the underpayment penalty if you owe less than $1,000 after withholding and credits, or if you paid at least 90% of the current year’s tax or 100% of the prior year’s tax, whichever is smaller. Higher-income taxpayers and some others have special rules, covered in IRS Publication 505.
What about Form 1099?
Clients who pay you may send an information return such as Form 1099-NEC. The IRS center page does not name that form or give its dollar threshold, so check the current instructions. What matters for you: you owe tax on the income whether or not a 1099 arrives. The form is a record, not the trigger.
Step by step: a simple setup for your first year
- Separate the money. Open a business checking account or at least a dedicated one, so every payment and expense is easy to find.
- Record every payment with date, client and amount, the day it arrives.
- Track expenses with receipts. They reduce the net earnings on Schedule C.
- Set aside a share of each payment for taxes in a separate account. The right share depends on your situation, so ask a tax professional or use the Form 1040-ES worksheet to pick a number.
- Put the four estimated tax dates on your calendar. Look up the exact dates on the IRS site each year.
- Collect the forms in early year: your records, any 1099s, and your previous return.
- File Schedule C and Schedule SE with your Form 1040.
Costs and time
Filing on your own can cost nothing beyond your time, while a tax professional charges for their service. Plan on a couple of hours a month early on to keep records. The larger cost is a surprise bill in April because nothing was set aside, plus a possible underpayment penalty.
Common mistakes
- Treating gross payments as your profit and forgetting expenses and the tax set-aside.
- Waiting for a 1099 before reporting income.
- Skipping the first quarterly payment and paying a penalty later.
- Mixing personal and business spending in one account.
- Copying advice from a forum without checking the IRS pages for your tax year.
Who this guide does not fit
It does not cover state taxes, sales tax, a business entity such as an LLC, or foreign income. It also does not replace a tax professional if you have employees, a mix of employment and freelance income, or complicated deductions. If you are choosing how to earn online in the first place, compare options such as monetizing a YouTube channel or the Amazon Associates program, and keep in mind the tax rules above apply to the profit from any of them.
Frequently asked questions
Is self-employment tax the same as income tax?
No. Self-employment tax pays for Social Security and Medicare at 15.3%. Income tax is calculated separately on your Form 1040.
What is the minimum I must earn before filing?
The IRS says you have to file if your net earnings from self-employment were $400 or more.
Which forms will I use?
Schedule C reports your business income or loss, Schedule SE calculates self-employment tax, and Form 1040-ES is used to figure and pay estimated tax.
Can I skip quarterly payments?
You may if you expect to owe less than $1,000 after withholding and credits. Otherwise, skipping can lead to an underpayment penalty.
