How to File Taxes as a First-Year Freelancer

First Year Taxes Are the Hardest. Here Is Why.

In your first year of freelancing, you likely underpaid taxes because:
- No employer withheld anything
- You did not know about quarterly estimated taxes
- You did not track business expenses to claim deductions
- You underestimated how much you owed

The result: A painful tax bill in April with possible penalties and interest.

This guide prevents that from happening.

Step 1: Gather Your Income Records

All 1099-NEC forms from clients who paid you $600+ (US). Your own records for all other income.

Step 2: Gather Business Expense Records

All business expenses, categorized. If you used FlowFund or any tracking tool, export the report. If you did not track, go through bank and credit card statements for the full year.

Step 3: Calculate Estimated Tax Owed

Net income (revenue - expenses) x roughly 25-30% = rough tax estimate.

This will be closer to 30-35% if your income is high, closer to 20-25% if income is modest.

Step 4: File the Right Forms (US)

Schedule C: Self-employment income and expenses. One per business.
Schedule SE: Self-employment tax calculation.
Form 1040: Main return, includes Schedule C and SE.

Step 5: Set Up Better Systems for Next Year

Open a tax savings account now. Set a rule: 25% of every payment goes here immediately. Set up quarterly tax payments. Use FlowFund to track every transaction going forward.

Free to start. No bank connection. No KYC. Works in 20+ countries.

💬 Join 100+ freelancers in the FlowFund Community →

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