Filing Self-Employed Taxes: Tips for Independent Contractors

Independent professionals and small business owners file taxes differently than traditional W-2 employees. If this is your first time managing taxes as an independent contractor, don’t worry—we’re here to help.

What are some common questions about filing taxes as an independent contractors?

If you’re an independent contractor, you probably have questions about taxes. How do you calculate and pay quarterly estimated taxes? Which expenses can you actually deduct? What are self-employment taxes, and how do they work?

You might also be wondering about the paperwork—forms like Schedule C or 1099-NEC—and how to keep your records organized so tax season doesn’t turn into a scramble.

Fortunately, understanding the basics of self-employed taxes can make the whole process much less overwhelming. Below, we’ll answer the most common questions about paying taxes as a self-employed professional.

What are self-employed taxes?

When you run your own business, you will be responsible for paying two main taxes:

1. Income tax, which is based on your tax bracket
2. Self-Employment (SE) Tax, which is both the employer and employee halves of Social Security and Medicare (FICA)

A good rule of thumb: Set aside about 30–35% of your gross income to cover your tax bill.

Don’t forget—if you live in a state with income tax, you’ll need to make estimated payments there too, not just to the IRS. Each state has its own deadlines and forms, so check your state’s business resources for specific guidance. The Small Business Administration (SBA) website also has helpful breakdowns of tax requirements state by state.

When are self-employed taxes due?

Estimated tax payments are due quarterly. Here’s why this matters: When a client pays you, no taxes are automatically withheld from that payment. By estimating and paying your taxes quarterly, you avoid a significant tax burden at the end of the year. Each quarter’s deadline falls on the 15th (or the next business day if it falls on a weekend).

Here’s the typical payment schedule outlined by the IRS:

January 1–March 31

• Due date: April 15 (Q1)

April 1–May 31

• Due date: June 15 (Q2)

June 1–August 31

• Due date: September 15 (Q3)

September 1–December 31

• Due date: January 15 of following year (Q4)

What tax forms do I need as an independent contractor?

For Self-Employment Tax: File Form 1040-ES, Estimated Tax for Individuals if your net earnings are $400 or more. This form includes a worksheet to help you calculate your quarterly payments.

For Annual Tax Return: Use Schedule C to file your annual tax return. You’ll also need to file Schedule SE (Form 1040 or 1040-SR), Self-Employment Tax to report your Social Security and Medicare taxes.

Where do you pay self-employed taxes?

You can find all these tax forms on the IRS website. When it’s time to pay, you have options: print out payment vouchers and mail them in, or pay online through the Electronic Federal Tax Payment System (EFTPS).

Either way, your quarterly payments cover both self-employment taxes (Social Security and Medicare) and income taxes. These payments tie directly into your annual filing with Schedule C and Schedule SE, so keeping up with them throughout the year makes April a lot easier.

What are some other tax tips for self-employed workers?

What expenses are actually deductible?

If it’s “ordinary or necessary” for running your business, you can usually deduct it. That’s the IRS’s basic rule, though “ordinary and necessary” leaves a lot of room for interpretation.

Here are some of the most common deductions for independent contractors:

• Home office: If you use part of your home exclusively for business, you can deduct a portion of your rent, mortgage, utilities, and internet.
• Equipment and supplies: Computers, software, office furniture, and supplies you need to do your work.
• Travel and transportation: Business-related mileage, flights, hotels, and meals (though meals are only 50% deductible).
• Professional development: Courses, certifications, books, and conferences that help you improve your skills or grow your business.
• Insurance: Health insurance premiums, liability insurance, and other business-related coverage.
• Marketing and advertising: Website costs, business cards, ads, and anything else you use to promote your services.
• Professional services: Fees for accountants, lawyers, or consultants you hire for your business.

Check Out: Self-Employed Tax Deductions You May Be Overlooking

How do I handle taxes if I work in multiple states?

If you work for clients in more than one state, you may have to pay income taxes in each state where you earn money. Each state has its own rules for reporting income, filing deadlines, and estimated payments, so it’s important to understand the requirements for every state where you do business. Keeping detailed records of where and when you earned income can make filing much easier. Meanwhile, consulting with a tax professional familiar with multi-state taxation can help you avoid mistakes or double taxation.

Can I hire someone to do my taxes?

If you work for clients in multiple states, things can get a bit more complicated. You might owe income taxes in each state where you earn money—and yes, that means separate filings with separate deadlines.

Every state has its own rules about what counts as taxable income, when payments are due, and how to file. So it’s worth taking the time to understand the requirements for each state where you do business.

Here’s one thing that can make it easier: Keep detailed records of where and when you earned each payment. That way, when tax time comes, you’re not scrambling to piece everything together.

And if filing taxes for multiple states feels overwhelming, it’s worth consulting with a a professional tax preparer or accountant who knows the ins and outs. They can help you navigate the rules, avoid costly mistakes, and make sure you’re not getting taxed twice on the same income.

Where can I find more information about self-employed taxes?

The IRS has a Self-Employed Tax Center that’s worth bookmarking. It’s packed with information and links to all the tax forms you’ll need, plus helpful breakdowns of self-employment taxes, business structures, home office deductions, and when it makes sense to work with a tax professional.

Whether you’re a sole proprietor, gig worker, or part of a partnership, you’ll find straightforward guidance and useful tools like Form 1040-ES to help you stay on top of your quarterly payments.

What other resources are available for independent professionals?

If you’re looking for more support to grow your small business, explore MBO Partners’ blog for expert tips and strategies. You’ll find helpful advice and insights to help you take the next step on your independent journey.

Looking to expand your client base? MBO’s talent marketplace connects you with top companies and work opportunities that align with your skills and business goals. Take the next step in your career here.

The information provided in the MBO Blog does not constitute legal, tax or financial advice. It does not take into account your particular circumstances, objectives, legal and financial situation or needs.  Before acting on any information in the MBO Blog you should consider the appropriateness of the information for your situation in consultation with a professional advisor of your choosing.