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Guide To Taxes When Self Employed
Updated over a week ago

This article was updated for Tax Year 2023, last edited on January 22nd, 2024.


  • Freelancers may be considered independent contractors which means they can receive a 1099 rather than a W-2.

  • As an independent contractor, certain expenses can be deducted from your income such as costs for using your home as a business and business mileage.

Why are my taxes higher as a freelancer than as an employee?

As an employee, your employer withholds your federal and state taxes from your paycheck to pay to the appropriate revenue authorities. As a freelancer, you are now your own employer and responsible for paying those taxes.

In order to have a lower tax bill by the time tax season arrives, you can pay estimated tax payments.

What is my IRS business code as a freelancer?

This depends on exactly what you’re doing as a freelancer. You can look up your NAICS code based on what you do for work as a freelancer.

I do a bunch of different freelance jobs for income. How do I report this?

If your income is made up of several different freelance jobs, you’ll need to report the income and expenses for each activity separately depending on the activity.

  • For example: if you drive for two different rideshare companies, both of these jobs can be reported under the NAICS code for transportation or taxi independent contractor.

  • In another example: if you drive for a rideshare company but also do some website design work, the income and expenses from these activities will need to be reported under different activities.

I’m a freelancer, what can I deduct?

The IRS’s most basic guideline is that to be deductible, the business expense must be ordinary and necessary.

  • Ordinary means that it’s common for other freelancers or those in your industry to deduct these items.

  • Necessary means that it’s needed for the success of your business

What are some examples of what I can deduct?

If it is directly related to the work you do, you can deduct it as an expense. Work-related expenses reduce your taxes by lowering the amount of self-employment income you get taxed on.

Here are some examples of business expenses for the self-employed:

See Publication 535 for more information.

Additional Resources:

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