Tax Considerations for Freelancers and Self-Employed Professionals

Being your own boss has plenty of perks—flexibility, autonomy, and the freedom to grow your business your way. But it also comes with a more complex tax landscape. If you’re a freelancer, gig worker, or self-employed professional, you need to understand your responsibilities and opportunities when it comes to taxes.

Here’s what you need to know to stay compliant and keep more of what you earn.

1. Understand the Self-Employment Tax
When you’re self-employed, you’re responsible for both the employer and employee portions of Social Security and Medicare taxes, collectively known as self-employment tax.

For 2025, this is still 15.3% of your net self-employment income (12.4% for Social Security and 2.9% for Medicare).

Additional Medicare Tax of 0.9% may apply if your income exceeds $200,000 (single) or $250,000 (married filing jointly).

The good news? You can deduct the employer-equivalent portion (half) from your taxable income as an adjustment, even if you don’t itemize.

2. Make Quarterly Estimated Tax Payments
Unlike W-2 employees, you don’t have automatic withholding. The IRS requires self-employed taxpayers to make estimated tax payments if they expect to owe $1,000 or more in taxes.

For 2025, the due dates are:

April 15, 2025

June 16, 2025 (since the 15th is a Sunday)

September 15, 2025

January 15, 2026

Failure to make timely payments can result in underpayment penalties, so plan ahead using IRS Form 1040-ES or reliable tax software.

3. Maximize Your Business Deductions
As a self-employed professional, you’re eligible to deduct ordinary and necessary business expenses, such as:

Home office expenses (using either the simplified or actual expense method)

Business-related travel, meals, and mileage

Equipment and supplies

Software subscriptions

Marketing and advertising

Legal and professional fees

Keep detailed, organized records and consider using accounting software or apps like QuickBooks Self-Employed to streamline the process.

4. Take Advantage of Retirement Plans for the Self-Employed
You have several options for tax-advantaged retirement savings, including:

SEP IRA: Allows contributions of up to 25% of net earnings from self-employment, up to $69,000 for 2025.

Solo 401(k): Combines employee and employer contributions for a potential total of $69,000, or $76,500 if you’re age 50 or older.

Traditional and Roth IRAs: Standard contribution limits apply—$7,000 in 2025, with a $1,000 catch-up for those over 50.

These plans not only help you save for the future but also reduce your taxable income today.

5. Use Tools Designed for the Self-Employed
Tax software built for independent workers can simplify your filing and maximize deductions. Tools like TurboTax Self-Employed, TaxSlayer Self-Employed, or FreshBooks Tax help track income, expenses, mileage, and even generate tax reports.

Look for features that integrate with your invoicing and bank accounts to reduce manual data entry and error risk.

6. Watch Out for Income Limits and Phaseouts
Certain tax benefits—like the Earned Income Tax Credit (EITC) or IRA deductibility—come with income thresholds that may phase out as your earnings increase. Also, eligibility for Qualified Business Income (QBI) deductions under Section 199A may be limited based on income type and thresholds.

Staying informed about these limits helps you avoid surprises and take advantage of all available benefits.

Final Thoughts from Jennifer
Navigating self-employment taxes can feel overwhelming—but it doesn’t have to be. By keeping accurate records, paying estimated taxes on time, and planning strategically, you can minimize your tax burden and keep more of your earnings.

At Walker Total Financial, we specialize in helping freelancers and self-employed professionals build smart, compliant, and profitable tax strategies. Reach out if you’d like help tailoring a plan that fits your business and your goals.