{"id":4454,"date":"2013-03-29T10:33:57","date_gmt":"2013-03-29T15:33:57","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=4454"},"modified":"2025-05-09T14:09:49","modified_gmt":"2025-05-09T19:09:49","slug":"tax-tips-for-freelancers","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/","title":{"rendered":"Freelancing? Self-Employed? Avoid These Tax Mistakes"},"content":{"rendered":"

Editor’s Note:<\/strong> Whether your paychecks come exclusively from steady contract work or you’re side-hustling on top of your 9-to-5, the IRS treats taxes for freelance work differently than employee income.<\/em><\/p>\n

Freelancing can be a rewarding way of life or a savvy way to make money, in addition to a full-time job, to pay down debt or build savings faster. But when it comes to taxes, a dollar earned on your own isn\u2019t the same as a dollar earned from an employer. If you plan on earning money on the side \u2013 or if you\u2019re trying to make a living as a freelancer \u2013 you should understand how the income you earn will be taxed. You\u2019ll learn how to keep more of your hard-earned money in your pocket and how to avoid surprise tax bills or penalties.<\/p>\n

Whether or not you have a full-time job, the IRS considers any money you earn on your own to be self-employment income. And they treat this income differently than income you earn as an employee. The following pointers will help you keep more of the money you earn come tax time.<\/p>\n

DON’T spend all that freelance money!<\/h3>\n

When you get a regular paycheck, your employer has already withheld Uncle Sam\u2019s cut. With freelance income, you’re responsible for setting that money aside to pay taxes. If you’re accustomed to receiving a tax refund, it can come as a big surprise that you might actually owe the government hundreds or thousands of dollars. Avoid getting caught with a big tax bill you can’t pay by making estimated tax payments every quarter. (If you’re not sure how much to pay, setting aside a third of any freelance income is a good rule of thumb.)<\/p>\n

DO report all your income.<\/h3>\n

As you start earning freelance income, it can be tempting to just leave it off your tax return. After all, how will the IRS know? Well, they will. For one, if you earn $600 or more from any one source, that person or company is required to file form 1099 with the IRS detailing how much they paid you. Later, IRS computers match your tax return to filed 1099s and red flag any discrepancies. If there is one, you\u2019ll get a bill for the difference…plus penalties and interest.<\/p>\n

DO keep your business records separate from personal.<\/h3>\n

As soon as you begin freelancing on a regular basis, it makes sense to open a new bank account that you use only for depositing business income and for expenses. Not only will this make it faster to prepare your tax return each spring, it will provide better evidence of business deductions in the unlikely (but always possible) event of an audit.<\/p>\n

DO take advantage of deductions.<\/h3>\n

If you\u2019re running a legitimate freelance business and not as a hobby, you can deduct ordinary and necessary expenses you incur in the course of doing your work. This includes everything from the office supplies you buy at Staples to miles you log in between visiting clients. (Good records<\/a> are key!)<\/p>\n

Also, be sure to take advantage of other deductions available to the self-employed. These include a deduction for half of the self-employment tax and contributions to a Simplified Employee Pension<\/a> (SEP-IRA), a kind of tax-deferred retirement account available to anybody with self-employment income.<\/p>\n

DON’T try to pass off a hobby as a business.<\/h3>\n

Let\u2019s say you restore old cars and occasionally sell one you\u2019ve worked on. Still, you end up putting far more money into parts than you ever make back in a sale. You get the genius idea to create a business for your restoration services so you can deduct all that chrome.<\/p>\n

Careful. To be considered a business (as opposed to a hobby) in the eyes of the IRS, you must expect to show a profit in three of the next five years. There are some uncommon exceptions, but in general it’s best to avoid taking deductions from mostly non-profit personal pursuits.<\/p>\n

DON’T be afraid to ask for help.<\/h3>\n

Your taxes may have been straightforward for years, but freelance income (and especially deductions) can add several pages to your tax return. Enlisting the help of a tax professional can be a good idea to help you maximize deductions and avoid mistakes that could trigger penalties \u2013 and unnecessary headaches \u2013 later on.<\/p>\n","protected":false},"excerpt":{"rendered":"

David Weliver, the publisher of MoneyUnder30.com, shares the do’s and don’ts of tax filing for freelancers and side-hustlers.<\/p>\n","protected":false},"author":418,"featured_media":4456,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27,62],"tags":[],"class_list":["post-4454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-small-business","category-self-employed"],"acf":[],"yoast_head":"Tax Tips for Freelancers | H&R Block<\/title>\n<meta name=\"description\" content=\"Taxes for the self employed can be complicated. Learn the ins and outs of tax filing for freelancers, bloggers and contractors with the experts at H&R Block.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Freelancing? Self-Employed? Avoid These Tax Mistakes\" \/>\n<meta property=\"og:description\" content=\"Taxes for the self employed can be complicated. Learn the ins and outs of tax filing for freelancers, bloggers and contractors with the experts at H&R Block.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/\" \/>\n<meta property=\"og:site_name\" content=\"H&R Block\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/hrblock\" \/>\n<meta property=\"article:published_time\" content=\"2013-03-29T15:33:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-05-09T19:09:49+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2013\/03\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png\" \/>\n\t<meta property=\"og:image:width\" content=\"331\" \/>\n\t<meta property=\"og:image:height\" content=\"296\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"H&R Block\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@hrblock\" \/>\n<meta name=\"twitter:site\" content=\"@hrblock\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"H&R Block\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/\"},\"author\":{\"name\":\"H&R Block\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/#\\\/schema\\\/person\\\/f4718b72c980dd652973129a5e10b6e9\"},\"headline\":\"Freelancing? Self-Employed? Avoid These Tax Mistakes\",\"datePublished\":\"2013-03-29T15:33:57+00:00\",\"dateModified\":\"2025-05-09T19:09:49+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/\"},\"wordCount\":739,\"image\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2013\\\/03\\\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png\",\"articleSection\":[\"Small business\",\"Self-employed\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/\",\"url\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/\",\"name\":\"Tax Tips for Freelancers | H&R Block\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2013\\\/03\\\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png\",\"datePublished\":\"2013-03-29T15:33:57+00:00\",\"dateModified\":\"2025-05-09T19:09:49+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/#\\\/schema\\\/person\\\/f4718b72c980dd652973129a5e10b6e9\"},\"description\":\"Taxes for the self employed can be complicated. Learn the ins and outs of tax filing for freelancers, bloggers and contractors with the experts at H&R Block.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#primaryimage\",\"url\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2013\\\/03\\\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png\",\"contentUrl\":\"https:\\\/\\\/resource-center.hrblock.com\\\/wp-content\\\/uploads\\\/2013\\\/03\\\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png\",\"width\":331,\"height\":296},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/small-business\\\/self-employed\\\/tax-tips-for-freelancers\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/resource-center.hrblock.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Freelancing? Self-Employed? Avoid These Tax Mistakes\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/#website\",\"url\":\"https:\\\/\\\/resource-center.hrblock.com\\\/\",\"name\":\"H&R Block\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/resource-center.hrblock.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/resource-center.hrblock.com\\\/#\\\/schema\\\/person\\\/f4718b72c980dd652973129a5e10b6e9\",\"name\":\"H&R Block\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/d3f2ab55aa4ed027afc8ce9fd703aa438b2279c917744a6f2b3741d614ca47b2?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/d3f2ab55aa4ed027afc8ce9fd703aa438b2279c917744a6f2b3741d614ca47b2?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/d3f2ab55aa4ed027afc8ce9fd703aa438b2279c917744a6f2b3741d614ca47b2?s=96&d=mm&r=g\",\"caption\":\"H&R Block\"},\"description\":\"The social media team at H&R Block works to provide valuable tax and personal finance information to clients - and potential clients.\"}]}<\/script>","yoast_head_json":{"title":"Tax Tips for Freelancers | H&R Block","description":"Taxes for the self employed can be complicated. Learn the ins and outs of tax filing for freelancers, bloggers and contractors with the experts at H&R Block.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/","og_locale":"en_US","og_type":"article","og_title":"Freelancing? Self-Employed? Avoid These Tax Mistakes","og_description":"Taxes for the self employed can be complicated. Learn the ins and outs of tax filing for freelancers, bloggers and contractors with the experts at H&R Block.","og_url":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/","og_site_name":"H&R Block","article_publisher":"https:\/\/www.facebook.com\/hrblock","article_published_time":"2013-03-29T15:33:57+00:00","article_modified_time":"2025-05-09T19:09:49+00:00","og_image":[{"url":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2013\/03\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png","width":331,"height":296,"type":"image\/png"}],"author":"H&R Block","twitter_card":"summary_large_image","twitter_creator":"@hrblock","twitter_site":"@hrblock","twitter_misc":{"Written by":"H&R Block","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#article","isPartOf":{"@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/"},"author":{"name":"H&R Block","@id":"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/f4718b72c980dd652973129a5e10b6e9"},"headline":"Freelancing? Self-Employed? Avoid These Tax Mistakes","datePublished":"2013-03-29T15:33:57+00:00","dateModified":"2025-05-09T19:09:49+00:00","mainEntityOfPage":{"@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/"},"wordCount":739,"image":{"@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#primaryimage"},"thumbnailUrl":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2013\/03\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png","articleSection":["Small business","Self-employed"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/","url":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/","name":"Tax Tips for Freelancers | H&R Block","isPartOf":{"@id":"https:\/\/www.hrblock.com\/tax-center\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#primaryimage"},"image":{"@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#primaryimage"},"thumbnailUrl":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2013\/03\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png","datePublished":"2013-03-29T15:33:57+00:00","dateModified":"2025-05-09T19:09:49+00:00","author":{"@id":"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/f4718b72c980dd652973129a5e10b6e9"},"description":"Taxes for the self employed can be complicated. Learn the ins and outs of tax filing for freelancers, bloggers and contractors with the experts at H&R Block.","breadcrumb":{"@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#primaryimage","url":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2013\/03\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png","contentUrl":"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2013\/03\/Screen-Shot-2013-03-29-at-10.26.42-AM4-2.png","width":331,"height":296},{"@type":"BreadcrumbList","@id":"https:\/\/www.hrblock.com\/tax-center\/small-business\/self-employed\/tax-tips-for-freelancers\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.hrblock.com\/tax-center\/"},{"@type":"ListItem","position":2,"name":"Freelancing? Self-Employed? Avoid These Tax Mistakes"}]},{"@type":"WebSite","@id":"https:\/\/www.hrblock.com\/tax-center\/#website","url":"https:\/\/www.hrblock.com\/tax-center\/","name":"H&R Block","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.hrblock.com\/tax-center\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.hrblock.com\/tax-center\/#\/schema\/person\/f4718b72c980dd652973129a5e10b6e9","name":"H&R Block","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/d3f2ab55aa4ed027afc8ce9fd703aa438b2279c917744a6f2b3741d614ca47b2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/d3f2ab55aa4ed027afc8ce9fd703aa438b2279c917744a6f2b3741d614ca47b2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d3f2ab55aa4ed027afc8ce9fd703aa438b2279c917744a6f2b3741d614ca47b2?s=96&d=mm&r=g","caption":"H&R Block"},"description":"The social media team at H&R Block works to provide valuable tax and personal finance information to clients - and potential clients."}]}},"_links":{"self":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/posts\/4454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/users\/418"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/comments?post=4454"}],"version-history":[{"count":0,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/posts\/4454\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/media\/4456"}],"wp:attachment":[{"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/media?parent=4454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/categories?post=4454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hrblock.com\/tax-center\/wp-json\/wp\/v2\/tags?post=4454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}