So for some context (why is he talking about taxes?). Most people that know me offline know I work in tax for my day job. For most of my friends who work as creatives (freelancers, solopreneurs, etc.), Tax is scary! Most of the homies have expressed to me some version of fear, anxiety or just general confusion around their taxes. Some folks nervously admit they haven't filed in two years, or they don't know how to deduct or which expenses to deduct, or they're terrified that one wrong filing or missed filing is going to get them thrown in federal prison. I think the prevailing visual for most creatives of the IRS is almost like a boogieman hiding under the bed, waiting to hit you with a vicious tax bill. But I swear taxes aren't (that) scary! Tax, just like anything else, is just a system with a very (emphasis on very) specific set of rules (that admittedly can feel monstrous at times). But just like any other game, once you learn the rules, you stop being afraid of it (or at least become less afraid of the rules). And I've played uno with some of y'all – once you know the rules, you're not afraid to negotiate.
If you take absolutely nothing else away from this guide, memorize this: To the extent humanly possible, take 30% of every single freelance invoice that gets paid to you and immediately put it into a high-yield savings account (HYSA). Do not look at it. Do not touch it. Pretend it doesn't exist. When you work a standard W-2 job, your employer automatically holds back a chunk of your paycheck. When you're a freelancer, you are the employer. That means you are on the hook for the self-employment tax (which covers Medicare and Social Security) plus your standard income tax. Setting aside 30% guarantees you never get caught slipping when tax season rolls around. And by keeping it in a HYSA, that money is quietly earning 4-5% interest. You're literally getting paid to hold onto your own tax money.
A lot of people panic in April because they assume tax season is a once-a-year event. It's not (if you work for yourself!). The U.S. operates on a "pay-as-you-go" system for taxpayers. As I mentioned earlier, if you're a standard employee, that means your employer is withholding taxes from each paycheck and making those payments to the IRS on your behalf. As a solopreneur/freelancer, however, you are expected to make an "estimated tax payment" to the IRS four times a year. You might assume this aligns with standard calendar quarters (end of March, June, Sept, Dec), but the IRS calendar is kinda weird. The actual deadlines you need to put in your calendar on repeat are:
- April 15th
- June 15th
- September 15th
- January 15th (of the following year)
If you're steadily pulling from that 30% HYSA stash we just talked about to make these payments, the anxiety around taxes (should) basically disappear. It just becomes another boring quarterly subscription.
People often draw a line between "freelancers" and "solopreneurs." A freelancer sounds like someone pulling odd jobs; a solopreneur sounds like someone building a scalable brand. The IRS genuinely does not care and often feels no need to tell the difference anyways. To them, you are all basically the same thing: a sole proprietor. Even if you go through the trouble of registering an LLC to protect your personal assets from any legal liability connected to the business (which is a different conversation)... The IRS still considers a single-member LLC a "disregarded entity" by default.* The money still passes directly through to your personal tax return. No matter what you call it, the tax reality is the same.
*An LLC is not a separate legal entity for tax purposes. The types of legal entities recognized by the IRS are 1) C corporations; 2) S corporations; and 3) partnerships. Each has their own rules. That's a different discussion for a different guide.
You don't need to be an accountant or tax preparer to understand the paperwork! You just need to know the core vocabulary (form names and what they are used for). Try to keep the following in mind (or screenshot, write em down, whatever)
W-2: what you get if you work a traditional day job. Taxes are already taken out. They tell you
how much they paid you and how much tax they withheld (took out of your check, basically –
you get some of this back in your tax refund if they take too much out of your paychecks)
1099-nec: if a client pays you $600 or more in a year, they are required to send you this to report
how much they paid you. They also send a copy to the IRS. You can use the numbers on this to
calculate your total revenue for the year (how much money you made).
Form 1040: your actual tax return. Freelancer or not, we all file one.
Supplements (attached to the 1040)
Schedule C: this is where you tally up all the revenue from those 1099s you received and subtract
your business expenses to find your actual profit. You attach this to form 1040.
Schedule SE: this form is used to figure out your self-employment tax based on the profit from
your Schedule C. You also attach this to form 1040
The benefit of being a freelancer is that you are only taxed on your profit, not your total revenue. To lower your profit, you write off expenses. The IRS rule is that an expense must be "ordinary and necessary" for your specific line of work. As a creative, this covers a lot:
- Software & Subscriptions (Adobe CC, Figma, Squarespace, AI if you use it).
- Business equipment (cameras, laptops, hard drives).
- Home office (but only if that space is used exclusively and regularly for business—answering emails from your bed doesn't count).
- Marketing and advertising.
- Travel exclusively for client gigs or conferences.
- Professional services (like paying a lawyer or accountant).
This is where people get cute and get caught. A lot of folks see a TikTok telling them they can
write off their whole lifestyle through an LLC. Do not do this!!
You cannot deduct:
- Your everyday wardrobe. Buying a Rick Owens jacket for a client meeting does not count unless it is a literal protective uniform or theatrical costume that can't be worn as streetwear.
- Personal meals. Eating a salad while working on your laptop alone doesn't make it a business expense. (Meals with clients to discuss business are generally 50% deductible).
- Your daily commute to a regular workspace.
- Gym memberships, even if "looking good is part of the brand."
The IRS algorithm knows when expenses look forced (yes, they have an algorithm).
I should have mentioned this one earlier. This seems to be the main one keeping y'all up at night. You missed a year because you were broke or overwhelmed. Then the next year rolled around, you were terrified about the previous year, so you didn't file that one either. Suddenly you're three years deep and avoiding your mailbox. First: breathe. The IRS is not sending a swat team to your apartment. This is incredibly common. They don't want to ruin you; they literally just want to close the tab (yes, I mean they want their money – but they also need your help calculating how much exactly). One thing about unfiled taxes: the penalty for "failing to file" is ten times higher than the penalty for "failing to pay" (5% a month vs. 0.5% a month). People assume that if they don't have the money, they should wait to file. Do not do this!! Even if you are completely broke, you should always submit the paperwork – that should stop the bleeding with respect to any penalties. Get those old returns filed. If you can't pay the lump sum, the IRS is surprisingly reasonable about setting up monthly payment plans (installment agreements). You just have to initiate the conversation. Hiding only makes it more expensive.
Consider this guide a "Starter Pack" on how to handle your money, not formal tax advice. It's just a helpful framework to get you started. Your job is to create, not to spend 40 hours deciphering the internal revenue code. Once your business hits a certain level of complexity—or if you realize your backlog is a mess and you need someone to look under the hood to structure your creative business the right way— it's worth bringing in a pro.
(It doesn't have to be me! Just make sure you do your due diligence – ensure that they aren't sheisty and promising you crazy large tax returns or like a zero percent tax rate – that's not realistic).
For your reference
- The 30% Rule & Quarterly Payments: IRS publication 505 (tax withholding and estimated tax). Covers the pay-as-you-go requirement and quarterly dates.
- Ordinary & Necessary Expenses: IRS Publication 535 (business expenses). Defines the rule for valid write-offs under Internal Revenue Code (the formal name for the "Tax Code", often referred to in abbreviation as "IRC") Section 162.
- Sole Proprietor vs LLC: IRS publication 334. Confirms that a single-member LLC is treated as a "disregarded entity" or "DRE" for tax purposes.
- Unfiled Taxes & Penalties: IRS Publication 594 (the IRS collection process) and IRC section 6651. Breaks down the difference between failure-to-file and failure-to-pay penalties, plus payment plan options.
- Forms: IRS instructions for form 1040, form 1099-NEC, Schedule C, and Schedule SE.