Freelance Writer Taxes in Illinois - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Illinois?

Yes, absolutely. As a freelance writer in Illinois, all income you earn is subject to both federal and state income taxes. The good news is you can significantly reduce your tax liability through deductions. 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. Schedule C allows you to deduct all ordinary and necessary business expenses, ultimately determining your net profit (or loss). This net profit is then added to your other income (if any) to calculate your adjusted gross income (AGI).

Illinois Taxes: Illinois has a flat income tax rate of 4.95% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be included in your Illinois income tax calculation (Form IL-1040). Because it's a flat tax, the percentage remains the same regardless of your income level. You'll calculate your Illinois taxable income by starting with your federal AGI and making certain Illinois-specific adjustments.

Top Tax Write-offs for Freelance Writers

Freelance writers have several opportunities to lower their tax bill. Here are some key deductions:

• 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. This includes a percentage of your mortgage interest or rent, utilities, property taxes, and homeowner's insurance. There's a simplified method available based on square footage, or you can calculate the actual expenses.
• Software & Subscriptions: Costs for writing software (like Scrivener, Grammarly Premium), editing tools, plagiarism checkers, project management software, and relevant online subscriptions (research databases, stock photo sites) are deductible.
• Computer & Equipment: You can deduct the cost of your computer, printer, and other equipment used for your writing business. For items with a useful life of more than one year, you'll typically depreciate the cost over several years, or you may be able to use Section 179 deduction or bonus depreciation to deduct the full cost in the year of purchase (subject to limitations).
• Mileage & Transportation: The 2024 federal 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 locations). You can also deduct parking fees and tolls. You cannot deduct commuting miles.

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% (12.4% for Social Security and 2.9% for Medicare).

You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you get to deduct one-half of your self-employment tax from your gross income on Form 1040, which helps to offset the impact. Self-employment tax applies to net earnings of $400 or more.

Closing Tip for Illinois Residents

Don't wait until the last minute! Keeping meticulous records of your income and expenses throughout the year will make tax time much less stressful. Consider using accounting software designed for freelancers. Also, remember to make estimated tax payments quarterly to avoid penalties. If you're unsure about any aspect of your tax situation, consulting with a qualified tax professional (like myself!) is always a wise investment. Good luck with your writing and your taxes!