Tax tips for freelancers: Everything you need to know
With tons of insight directly from real freelancers.
Hey!
I hope you’re all well. I’m back now from my short break away (and the small bout of flu that wiped me out over the latter half of last week), and we’re all back to normal at the Freelance Writing Network.
As promised, today I’m sharing a collection of insights directly from real freelancers with all the best advice for how to prepare for tax returns and how you can stay on top of everything throughout the year.
Remember: Advice may differ slightly depending on whether you are in the UK or the USA, and I would recommend familiarising yourself with the advice of official channels first and foremost.
If you are in the USA, you can find the relevant information here from the IRS.
If you are in the UK, you can find the relevant information here from Gov.UK.
If you are based elsewhere, please be sure to check the relevant government channel detailing self-employed and freelance tax returns.
Did you know? Substack subscriptions (like one to the Freelance Writing Network) are tax deductible!
And a big shout out to all those who shared their top tips for managing tax returns and tax season. If you have anything you would like to add, please do leave a comment and share your insight!
Alexis
Content Strategist/Writer, mainly for tech companies, and currently building a portfolio of personal, lifestyle, and humor writing.
My top tip: Keep a spreadsheet (or another tracking system) to regularly update your monthly income and expenses—essentially, an income statement.
Here’s my system:
I track client invoices by adding a new line for each one I send.
At the end of each quarter, I update expenses (since I file quarterly VAT taxes in Amsterdam).
My spreadsheet has four tabs—one for each quarter—with a system for marking invoices as "sent" and "paid" to stay on top of payments.
To stay organized, I also:
Store invoices & receipts in Google Drive under separate "Invoices" and "Expenses" folders for each quarter.
Use Harvest for invoice creation. While most clients have their own billing systems, I rely on Harvest to generate professional invoices, track billable hours (for personal reference), store client & project details.
Updating my records regularly (instead of scrambling at the end of the year) makes tax season much less stressful—especially as a freelancer managing multiple clients.
Richard
Technical Writer/Consultant
Invest in accounting software to make your life easier. I use QuickBooks, and I know others have had success using FreshBooks. I’m sure other useful ones exist too, and with a range of capabilities depending on your budget or situation.
These will automatically track your income and expenses, can generate invoices and help work out your taxes. It’s my least favourite job each year, so I always make use of the software as much as possible. If you’re anything like me, it’ll help save you some hassle at least.
Bethia
PR/Writer
File your invoices as you go. Don’t leave them on your desktop to file later, you won’t.
Have a sensible invoice numbering convention. Even if it’s just a number for the client then a number for the invoice - i.e. 31 is my third client’s first invoice of the year. You’ll thank yourself when you can tell at a glance what work an invoice pertains to.
Deduct taxes monthly and separate them from your personal savings (even if you’re a sole trader and don’t have to). Put them in a notice account if you can, so they’re doing something while they sit. Track expenses monthly (or at least quarterly). It ends up being faster. If there is any risk you won’t stay on top of things, get an accountant. It’s cheaper than an unpaid tax demand.
Christina
Editor/Ghostwriter
My main tips would be:
Look at paying your taxes quarterly. It makes it so much easier than trying to pay in one go, and forces you to stay on top of things.
Setup a retirement fund of some kind. If you’re 100% freelance, nobody else is doing this for you. I know that various schemes exist so be sure to research and set something up. Old age creeps up on you sooner than you’d think!
Set aside a % of earnings each month into a safety fund. You never know when additional bills or taxes might hit, and you absolutely want to be as safe as possible. You can always use that money at a later date if needs be, but better to have it just in case it’s needed.
Mary
Influencer/Writer
I track receipts for things I bought specifically classes/books. and income. I don't make enough to put it in a spread sheet yet, so I have a tab in one note where i track it. If it's not a lot of money that you make it might be better to consider it a hobby and not track it as a "job" at all. I only started and didn't take it seriously in 2024, after things I bought I made $30. I have to report my income. But I don't necessarily want to report write offs as a business because I didn't earn enough to really be a business.
Ben
Journalist/Editor
For those in the U.S., I’d start at Freelancers Union. It has a tax center item in the site’s menu and links to other beneficial resources like a contract creator.
Michael
Writer/Journalist
Two things I learned when I began freelancing. First, I assume 50% of my gross will go to taxes. They won't be that high after deductions, but it's a good rule of thumb because it means you''ll always have enough to cover a higher-than-expected tax bill. Plus when I quote my rate I'm always thinking about the minimum amount I get to keep. Often times a small job at a low rate, say $400, just isn't worth it, unless I can make it up on volume or it's a regular gig that ends up being a decent amount annually.
Point is, early in my career I said yes to nearly everything, but what I found was that I spent a lot of time on low-paying projects that didn't amount to much after taxes.
Second, I suggest freelancers track how much time they spend on tax prep. First time I did this I realized I lost several days of work in April. The solution: keep track as you go throughout the year, that way it's a few hours a month, but never a full day lost.
David
Copywriter/Content Writer
One thing I learned the hard way was to always categorize expenses properly from the start (not doing this caused genuine full days of work). The first time I filed taxes as a freelancer, I had to go back through a year’s worth of transactions and figure out what was office supplies, software, travel, or client-related costs.
These days, I have a dedicated business credit card which categorizes every purchase as I go. I also have a buffer fund which I use in case of surprise tax bills. I tend to reset this buffer fund each year, on the occasions whereby it is not needed.
If you’re making a good income as a freelancer, I’d also suggest having an accountant look at your situation and finances at least once to make sure you’re doing everything in the right way.
Anonymous
Editor, Proofreader & Content Writer
I keep my cashbook up to date and have meetings with my accountant every two months. Then when tax time comes, we are both prepared.
Stephanie
How tos/Blogs
I do it myself and make sure to save 25% of every single payment to keep for taxes.
Auzin
Content Writer/Designer, UX Writer
Brass Taxes has completely changed the way I feel about taxes. I almost look forward to tax season now! They are dedicated to helping freelancers, artists, and creatives understand and feel more confident about their taxes. The tax professional I work with at Brass Taxes is excellent and the whole service is absolutely worth the (reasonable) cost.
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This was super helpful!
Loads of great tips here! Thanks.