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Every summer, millions of people find themselves in the same boat — juggling an influx of freelance work that makes their bank account happy… but their taxes more complicated.

If you've been consistently freelancing for a while,then you may know most of the information here.

But if this is your first time freelancing,you'll want to pay close attention to make sure you don't run afoul of the IRS.

That's because freelancers (and other self-employed people) have a number of extra tax hoops to jump through. Self-employment tax, quarterly payments, deductions — it's a different world from what traditional employees face.

But don't worry, you don't need to be a tax expert to stay on track. Whether you're a seasoned pro or just starting out, a few simple strategies can help you avoid tax pitfalls, keep more of what you earn, and ensure you're prepared for all the important tax deadlines. The next one is September 16!

Let's dive in!

Understanding Your Tax Obligations as a Freelancer

When you freelance, the tax landscape changes significantly. Here are the biggest differences freelancers face:

You're Responsible for Self-Reporting:Unlike traditional employees who have taxes automatically withheld, freelancers are on their own to track income, pay self-employment taxes, and make estimated quarterly payments to the IRS.

This can be a rude awakening.No one tells you when you start freelancing that taxes don't automatically come out of your payments — until the IRS sends you an underpayment bill as a reminder.

Keeping Track of All Your Income:You must report all your freelance income to the IRS, even if you don't receive a Form 1099. Payments in cash or through services like PayPal or Venmo still count. If your net earnings from freelancing exceed $400, you must file a tax return. Ignoring this can lead to penalties, so careful tracking is key.

Paying Estimated Quarterly Taxes:Freelancers are responsible for filing and paying estimated quarterly taxes. This is especially critical for summer freelancers who might have a sudden income spike. Missing quarterly deadlines can result in penalties. The next estimated tax payment is due September 16 and covers income received between June 1 and August 31. IRS Form 1040-ES will help you calculate these payments. Report link: https://www.irs.gov/forms-pubs/about-form-1040-es

New to Freelancing?If this is your first summer freelancing and you started after June 1, you only need to estimate and pay taxes on the income earned after that date. But don't ignore it — better to stay ahead than catch up later.

You're Responsible for Self-Employment Tax:Freelancers must also pay self-employment tax, which covers Social Security and Medicare contributions. This totals 15.3% of your net earnings — 12.4% for Social Security and 2.9% for Medicare. The good news? You can deduct half of this tax, which helps reduce your taxable income. (And that's not the only deduction you can take. More on that in a moment.)

Staying Organized as a Freelancer

Freelancing brings flexibility, but as you've just read, it also comes with a lot of added responsibility. And from personal experience, I can tell you that the IRS doesn't care if you didn't know — you'll still get hit with penalties and bills if you miss the mark.

The result? More work and stress for you.

Fortunately, there are good practices that make freelancing (and taxes) manageable — and even save you time in the long run.

1. Set aside 30% of every payment for taxes.It's tempting to treat every freelance payment as extra cash, but one of the smartest strategies is to set aside 30% of every payment for taxes. Do this immediately, before the money gets absorbed into other expenses.

To simplify, automatically transfer 30% of each payment to a separate savings account. This ensures you're covered when tax deadlines roll around, avoiding a last-minute scramble.

2. Keep meticulous records, or use software to do it for you.As a freelancer, you're responsible for tracking your income and expenses. Personally, my work is simple enough that a spreadsheet works fine, but if your projects are more complex, you may want to invest in bookkeeping software to streamline the process.

Tools like QuickBooks Self-Employed and FreshBooks make it easy to track income, expenses, and even mileage. These apps can export your data directly to tax software, saving you from manual data entry.

3. Categorize your business expenses as you go.Organizing expenses throughout the year will save you time and stress during tax season. Common categories include office supplies, marketing, vehicle expenses, and utilities.

Many bookkeeping apps allow you to set up custom categories, making it easy to track and report later. I recommend reviewing your expenses periodically to avoid trying to recall what that receipt from months ago was for.

4. Track your deductions diligently.Most freelance expenses qualify as deductions, as long as they're directly related to your work. Deductions reduce your taxable income, so it's crucial to track them properly. A few common deductions include:

-       Mileage for business travel (just keep detailed records of your trips).

-       Client meetings and meals, provided they're directly related to your freelance work.

-       Temporary workspaces and accommodations, as long as they're necessary for your work.

For any deduction, keep detailed records: date, location, purpose, and receipts. You can stick to paper records if you don't have many expenses, but apps like Expensify or Wave make tracking easy and organized.

By staying organized and diligent about tracking deductions, you'll maximize your tax savings and keep more of what you earn.

Key Tax Deadlines and Forms to Know

Staying on top of tax deadlines and understanding the forms you need to file are crucial for freelancers. Missing a deadline or filing the wrong forms can lead to penalties and unnecessary complications. Here are the key dates and forms you need to be aware of, plus how to file your quarterly estimated taxes.

Q3 Estimated Tax Payment Deadline: The next estimated tax payment is due September 16, 2024, covering income earned between June 1 and August 31. If you just started freelancing this summer, you'll likely need to file and pay estimated taxes on your income during this period. If you've been freelancing all year, this is your third quarterly payment of the year.

Paying your estimated taxes is fairly straightforward. You can use IRS Direct Pay to submit your payment directly from your checking or savings account with no fees. You can also mail your payment with Form 1040-ES.

Form 1099-NEC and 1099-K:If you've earned over $600 from a single client, you should receive a Form 1099-NEC, which reports nonemployee compensation. If you've processed over $5,000 in payments through third-party platforms like PayPal or Venmo, you may receive a Form 1099-K. However, even if you don't receive these forms, you are still required to report all of your earnings to the IRS.

Schedule C and Schedule SE: When filing your taxes, use Schedule C (Form 1040) to report your business income and expenses. If you have multiple freelance gigs in different fields, you may need to file multiple Schedule Cs. You'll also need Schedule SE (Form 1040) to calculate your self-employment tax, which covers Social Security and Medicare contributions.

Form 1040-ES: This form is used to calculate and pay your quarterly estimated taxes. The IRS provides a worksheet to help estimate your tax liability for the year. Review your prior year's return and adjust your payments if your income changes significantly.

Staying organized and aware of these deadlines and forms will help you avoid surprises and penalties, making tax season much less stressful.

When It's Time to Call in a Tax Professional

Managing your own taxes can be overwhelming — especially during busy seasons like summer. And let's be honest, the IRS doesn't make it easy. So, when should you consider consulting a tax professional?

Answer: When it saves you time, money, or your sanity.

If your freelance income is complex — multiple income streams, working across different states, or significant deductions — it's probably worth bringing in a tax pro. Especially if taxes aren't your thing.

A tax professional can ensure you don't miss any deductions, help with filing multiple Schedule Cs, and accurately estimate your quarterly payments. They can also assist with issues like amended returns or audits.

They'll make sure you're taking full advantage of deductions. With their knowledge of tax laws, industry-specific deductions, and potential audit triggers, a tax pro can guide you through the complexities, like whether your home office qualifies or how to categorize tricky expenses.

And don't forget about the time saved. For freelancers juggling clients and deadlines, outsourcing tax prep frees up valuable time. It also reduces the stress of navigating tax complexities solo. Knowing a pro is handling your taxes lets you focus on your work instead of tax worries.

If you go this route, choose someone experienced with freelancers or self-employed individuals. Certified Public Accountants (CPAs), Enrolled Agents (EAs), or tax attorneys are all qualified to help.

Consulting a tax professional is a smart investment. It can help you maximize deductions, avoid mistakes, and streamline your tax process — especially during your busiest seasons.

Freelance Summer, But Make It Tax-Savvy

Freelancing in the summer often means more projects — and more tax challenges. Staying on top of quarterly payments, tracking expenses, and maximizing deductions are crucial to keeping your finances in order and avoiding tax season surprises.

By implementing the strategies we've covered — setting aside money for taxes, tracking your income and expenses, and staying aware of key deadlines — you'll be ready to handle your tax obligations without the stress. Whether you go it alone with digital tools or consult a tax professional, staying on top of it all is the key to keeping your freelance business thriving year-round.

By staying organized and proactive now, you'll not only make tax season easier but also set yourself up for long-term success. Your future self — and your wallet — will thank you for it.