Freelancer & Self-Employed Tax Guide 2026

Understanding Self-Employment Tax

As a freelancer or self-employed individual, you pay both the employer and employee portions of Social Security and Medicare taxes. This is called self-employment tax and is 15.3% of your net income.

Breakdown: 12.4% for Social Security (on first $184,500 in 2026) + 2.9% for Medicare (on all income). If you earn over $200,000, you pay an additional 0.9% Medicare tax.

Essential Business Deductions

Home Office Deduction

If you use part of your home exclusively for business, you can deduct related expenses. Simplified method: $5 per square foot (max 300 sq ft = $1,500). Regular method: actual percentage of rent, utilities, insurance, repairs.

Business Mileage Deduction

For 2026, the standard mileage rate is $0.70 per mile. Track all business miles (client meetings, deliveries, work-related travel). Use a mileage tracking app or keep a detailed log.

Health Insurance Premiums

Self-employed individuals can deduct 100% of health insurance premiums for themselves, their spouse, and dependents. This is an "above-the-line" deduction, meaning it reduces your adjusted gross income.

Equipment and Software

Computers, cameras, software, subscriptions, and tools necessary for your business are fully deductible. Large items (over $2,500) may need to be depreciated over several years.

Quarterly Tax Payments

Unlike W-2 employees, freelancers must pay taxes quarterly. If you expect to owe $1,000 or more, you must make estimated payments on these dates:

• Q1: April 15
• Q2: June 15
• Q3: September 15
• Q4: January 15 (following year)

Retirement Planning for Freelancers

Self-employed individuals have tax-advantaged retirement options: SEP IRA (up to $72,000 in 2026), Solo 401(k) (up to $72,000 + $8,000 catch-up if 50+), or SIMPLE IRA (up to $16,000 + $3,500 catch-up).