Will I Get a 1099?

• When you work as a freelance writer, you are responsible for reporting all of the income you make and for paying federal, state and local income taxes on that money. In addition to those taxes, freelancers are responsible for paying the self-employment tax on the money they make. If you do most of your freelancing for businesses based in the U.S., you can expect to receive a 1099-MISC from each firm you do more than $600 worth of work for. But do not assume that you will receive a 1099-MISC from everyone you work for. The 1099-MISC form is important, but you still need to manually track the income you receive from every freelance writing client.
  
  

Do I Need a Separate Bank Account?

• As a freelance writer, you may be entitled to write off a number of things, from professional memberships to mileage to and from the library. But taking those deductions means proper record keeping, and keeping personal and business expenses separate is essential. Setting up a separate bank account for your freelance writing business is one of the best ways to accomplish that goal. Many banks offer free or low-cost business bank accounts, so you can set one up and use it to keep track of the money you make and the expenses you incur.
  
  

What About My Traditional Job?

• Many freelance writers also work at traditional jobs while they build their writing careers. If you fall into this category, you can use your traditional job to plan the taxes for your freelance career. Since no money is withheld from your freelance writing income, having extra money taken out of your regular paycheck will reduce the amount you owe the Internal Revenue Service when you file your taxes. The W-4 you fill out contains a special line where you can request additional withholding, which can be a big help for freelance writers.
  
  

Do I Need to Make Estimated Payments?

• If your advance tax planning shows that you will owe more than $1,000 to the IRS when you file your return, you may need to start making estimated quarterly payments to the tax agency. If you fall into this category, consult with a CPA or tax expert to set up your payments and plan going forward. If you are right on the edge of the $1,000 threshold and you also have a regular job, adjusting the withholding on your W-4 can reduce the extra taxes you owe and possibly help you escape the quarterly filing requirement.