What taxes do first-time freelancers have to pay?

Freelancers pay federal income tax and self-employment tax (15.3% for Social Security and Medicare) on their net profit, plus state income tax in most states. Because no employer withholds these, you typically make quarterly estimated payments during the year and settle up when you file.

What tax forms does a freelancer file?

Most freelancers file Schedule C (to report business profit or loss) and Schedule SE (to calculate self-employment tax) with their Form 1040. You use Form 1040-ES to make quarterly estimated payments, and clients who pay you $600 or more may send you a Form 1099-NEC.

How much should a first-time freelancer set aside for taxes?

A common starting point is 25–30% of net profit, which covers self-employment tax plus federal income tax for many people, with state tax pushing it higher in some places. The exact amount depends on your income, filing status, deductions, and state, so it's worth running your real numbers.

Do I need to pay quarterly taxes my first year freelancing?

If you expect to owe at least $1,000 in tax for the year, yes. First-year freelancers sometimes get caught out because there's no prior-year freelance tax to base a safe harbor on, so estimate carefully or increase a W-2 job's withholding if you have one.

What can I deduct as a new freelancer?

Ordinary and necessary business expenses — a home office, equipment and software, the business-use share of your phone and internet, mileage, supplies, and professional development — plus self-employed health insurance and retirement contributions as adjustments to income. Keep records from day one.

Filing taxes as a freelancer for the first time

Your first year self-employed comes with a tax system that works nothing like a W-2 paycheck. No one withholds anything, you owe a tax employees don't, and the IRS wants money four times a year. It's very manageable once you see the whole picture — so here's the whole picture.

Last reviewed: June 2026

What's different now that you're self-employed

No withholding. Clients pay you the full amount; setting aside tax is entirely on you.
A new tax. You owe self-employment tax — 15.3% for Social Security and Medicare — on top of income tax.
Quarterly payments. Instead of paycheck withholding, you send the IRS estimated payments four times a year.
You can deduct expenses. Business costs lower your taxable profit, which employees can't generally do.

The forms you'll meet

Schedule C — reports your business income and expenses (your profit).
Schedule SE — calculates your self-employment tax.
Form 1040 — your main return, where it all lands.
Form 1040-ES — the vouchers/worksheet for quarterly estimated payments.
Form 1099-NEC — what clients send you (and the IRS) when they pay you $600 or more. You owe tax on your income whether or not you receive one.

Your first-year game plan

Separate your money. Open a business checking account and a savings account just for taxes. It makes everything that follows easier.
Track income and expenses from day one. A spreadsheet is fine to start. Every deductible expense lowers your tax — see the deduction checklist.
Set aside tax off every payment. Move 25–30% of profit into the tax account as you get paid; how much to set aside helps you dial it in.
Pay quarterly. If you'll owe $1,000+, send estimated payments on the IRS schedule — how to pay quarterly estimated taxes walks through the methods.
File Schedule C + SE with your 1040 at tax time, and reconcile what you already paid in.

The first-year traps

The self-employment tax surprise. Many first-timers budget for income tax and forget the extra 15.3%. Don't.
No safe harbor to lean on. The handy "pay 100% of last year's tax" safe harbor is weaker your first year if you had little or no prior freelance tax — so estimate this year carefully, or raise a W-2 job's withholding to cover it.
Mixing personal and business. It turns deductions into a guessing game and weakens your records if you're ever questioned.

See your first-year numbers

Our free Quarterly Tax Estimator turns your expected income into self-employment tax, income tax, and four quarterly payments with real due dates — exactly what a first-time freelancer needs to budget. Nothing leaves your browser.

Estimate my taxes →

Frequently asked questions

What taxes do first-time freelancers pay?: Federal income tax and 15.3% self-employment tax on net profit, plus state income tax in most states — usually via quarterly estimated payments since nothing is withheld.
What forms does a freelancer file?: Typically Schedule C and Schedule SE with Form 1040, Form 1040-ES for quarterly payments, and you may receive 1099-NEC forms from clients.
How much should I set aside?: Often 25–30% of net profit, higher in high-tax states or brackets. Run your own numbers to be sure.
Do I pay quarterly my first year?: If you'll owe $1,000+, yes. First-years can't fully lean on the prior-year safe harbor, so estimate carefully or raise W-2 withholding if you have a job.
What can I deduct as a new freelancer?: Ordinary business expenses (home office, equipment, software, phone/internet share, mileage, supplies) plus health insurance and retirement contributions. Keep records from day one.