• What is Copywriting?
    • Why Copywriting is One of the Most Enjoyable, Flexible Careers
    • Answers to Your Top Questions About Copywriting
  • Blog
    • Most Popular
    • Mindset & Professional Development
    • Portfolio
    • Business Development
    • Book Recommendations
    • Pitching
    • Copywriting Tips
    • Terms to Know
  • Podcast
    • Latest Episodes
    • Top Episodes for New Copywriters
    • Student Stories
  • Copywriting Course
    • Learn About the Comprehensive Copywriting Academy
    • CCA Student Sign In
    • CCA Student Testimonials
    • Videos: CCA Student Reviews
  • Store
  • About Us
    • About Us
    • About Nicki
  • Copywriter Jobs
  • Contact Us

Filthy Rich Writer

Tips, tools, & training for new and aspiring copywriters.

Tips, Tools and Training for New and Aspiring Copywriters

  • What does “Filthy Rich” mean? It means having a job you love, being good at what you do…and making great money doing it!

Copywriting Q&A: Planning for Taxes

By Nicki Krawczyk

Tax Tips for Copywriters Doing Freelance Work

If you’re moving from on-staff work to freelancing—or even just freelancing on nights and weekends—you’re in for a whole new world of taxation. Here’s what you need to know…

Today’s question comes from Meera V., who asks, “Are there any tax implications I should know about when I accept freelance work? Clients don’t withhold taxes, do they?”

This is a very astute question. Whenever you’re making money outside of the standard “working for a company on-staff” model, you have to pay taxes on that money.

When you’re working on-staff, your company takes out money from your taxes from your paycheck. But when you’re freelancing, and often when you’re contracting, your client is not taking out money for taxes. You get the full amount, meaning that setting aside money for taxes is up to you.

Now, first, let me preface all of this by saying that I am not a tax or financial professional. I can tell you what I do, but I strongly recommend you consult with a licensed tax preparation professional.

Okay, that said, let’s get down to it. The crux of all of this is that if you’re making any kind of freelance income, you need to be saving some of it for taxes.

When you make money outside of an on-staff job, you have to pay income tax (at least Federal and probably also State, depending on where you live) and you also have to pay self-employment tax. Neither of these is cheap.

For every payment that you get for a project, you should be setting aside 25%-40% in a separate savings account. Don’t put this money in your checking account or your regular savings account; you’ll spend it and then you’ll be in deep trouble come April 15th.

Personally, I like to set aside 50% of each check I get in because it helps me automatically set aside money. Once my taxes are paid, I can transfer the remainder into my personal savings account.

If you make a lot of freelance income, you may have to switch over to paying quarterly taxes. In total and complete honesty, I’m not at all sure what that threshold is; my accountant switches me over as needed. (Consult a tax professional!)

Another reason you should talk with a tax professional is that freelancers are eligible to claim all kinds of things as deductions, from commuting miles and your home office space, to advertising and professional development. Again, though, this gets complicated and trying to deduct things you shouldn’t is a great way to get in trouble with the IRS.

When you’re looking for an accountant, I’d strongly recommend finding one who has experience working with other freelancers and/or contractors. It’s even better if he/she has experience working with freelance/contract writers, since they might be able to suggest other deductions you haven’t even thought of.

Your turn! How do you remember to set aside tax money? Let us know in the comments below!

Tweet
Share
Pin
Share
0 Shares

Filed Under: Business Development, Copywriting Q&A, Mindset & Professional Development

Interested in Copywriting? Get our Free Video Training!

Plus, get on the list for updates, freebies, and more :) 



About Nicki Krawczyk

Nicki is a copywriter, copy coach and the founder of Filthy Rich Writer. She's been writing copy for more than 20 years.

Follow us for more free tips

Facebook
Facebook
fb-share-icon
Twitter
Visit Us
Follow Me
Tweet
Pinterest
Pinterest
fb-share-icon
Instagram

Search Posts By Topic

Click here to subscribe

Break Into Copywriting

Sign up to get our FREE video training, special resources, and more!



Click here to subscribe

Portfolio Tips

Why listing out all of your possible copywriting services may not be a great idea

Do You Need to List Your Copywriting Services on Your Portfolio Site?

Should I List Prices on My Copywriting Website?

4 Things Most Copywriters Get Wrong on Their Portfolio Websites

4 Things Most Copywriters Get Wrong on Their Portfolio Websites

Comprehensive Copywriting Academy

Comprehensive Copywriting Academy from Filthy Rich Writer

Join the copywriting training program that's helping people just like you build successful copywriting careers!

Recent Articles

  • 5 Ways Working in an Office as a Copywriter is Not What You Think
  • Book Pick: How to Get Out of Your Own Way and Achieve Copywriting Success
  • Book Pick: How Copywriters Can Collaborate More Effectively
  • Staying Productive When I’m Unmotivated: Pomodoro Technique
  • Book Pick: Why Your Obsession with Money is Getting in the Way of Your Copywriting Success
Orange square with text reading award winning designs and free domains Squarespace
  • View our Affiliate Link Disclosure here

    Copyright 2022 Filthy Rich Writer | About Us | Terms of Service | Privacy Policy| Business Affiliates