Freelance Writer Taxes in Colorado - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Colorado?

Yes, absolutely. As a freelance writer in Colorado, all income you earn is subject to both federal and state taxes. Here's a breakdown:

• Federal Taxes: The IRS requires you to report your freelance writing income on Schedule C (Profit or Loss from Business), which is filed with your Form 1040. This form details your income and expenses, allowing you to calculate your net profit (or loss). You are considered self-employed by the IRS, meaning you're responsible for paying both income tax and self-employment tax (more on that later).
• Colorado State Taxes: Colorado has a flat income tax rate of 4.40% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be included in your total Colorado taxable income, and this flat rate will be applied. Colorado also requires you to file a state income tax return (Form DR 0104) to report your income and calculate your state tax liability.

Top Tax Write-offs for Freelance Writers

One of the benefits of being a freelancer is the ability to deduct business expenses, reducing your taxable income. Here are some key write-offs for freelance writers:

• Home Office Deduction: If you use a portion of your home exclusively and regularly for your writing business, you can deduct expenses related to that space (mortgage interest or rent, utilities, insurance, etc.). There's a simplified method based on square footage, or you can calculate actual expenses.
• Software & Subscriptions: Costs for writing software (like Scrivener, Grammarly), editing tools, plagiarism checkers, project management software, and relevant online subscriptions are deductible.
• Equipment: Computers, printers, cameras (if used for content creation), and other equipment used for your writing business are deductible. You may be able to deduct the full cost in the year of purchase (Section 179 deduction or bonus depreciation, subject to limitations) or depreciate the cost over several years.
• Mileage & Transportation: The 2024 standard mileage rate is 67 cents per mile for business use of your vehicle. Keep a detailed log of all business miles driven (e.g., to client meetings, research trips). You can also deduct parking fees and tolls. Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, insurance, depreciation), but the standard mileage rate is often simpler.

The 15.3% Self-Employment Tax Surprise

Many freelancers are surprised to learn about self-employment tax. When you're an employee, your employer pays half of your Social Security and Medicare taxes. As a freelancer, you're both the employer and the employee, so you're responsible for the full 15.3%. This is broken down as 12.4% for Social Security and 2.9% for Medicare. You'll calculate this tax on Schedule SE (Self-Employment Tax), which is filed along with your Form 1040. The good news is you can deduct one-half of your self-employment tax from your adjusted gross income on Form 1040, which reduces your overall income tax liability.

Note: Self-employment tax applies to earnings over $400.

Closing Tip for Colorado Residents

Don't wait until the last minute! Keeping accurate records of your income and expenses throughout the year will make tax time much easier. Consider using accounting software or a spreadsheet to track everything. Also, remember that estimated tax payments are generally required quarterly if you expect to owe $1,000 or more in taxes. Consulting with a qualified tax professional (like myself!) can help you navigate the complexities of self-employment taxes and ensure you're taking advantage of all available deductions. Good luck with your writing and your taxes!