Freelance Writer Taxes in Indiana - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Indiana?

Yes, absolutely. As a freelance writer in Indiana, all income you earn is subject to both federal and state income taxes. The good news is you can reduce your tax liability through deductions. Here's a breakdown:

Federal Taxes: Your freelance writing income is considered business income and is reported to the IRS on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. You'll report your gross income from writing, then subtract all allowable business expenses to arrive at your net profit. This net profit is then added to your other income (if any) to determine your adjusted gross income (AGI) and ultimately, your taxable income.

Indiana State Taxes: Indiana has a flat income tax rate of 3.15% for 2024. This means regardless of your income level, you'll pay 3.15% of your taxable income to the state. You'll report your Schedule C net profit on Indiana’s Form IT-1040. Indiana also allows for deductions similar to the federal level, which can lower your taxable income.

Top Tax Write-offs for Freelance Writers

As a freelance writer, you have several opportunities to reduce your taxable income. 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 as well.
• Software & Subscriptions: Costs for writing software (like Grammarly, ProWritingAid), editing tools, plagiarism checkers, project management software, and any relevant online subscriptions 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 & Vehicle Expenses: When you drive for work (e.g., to meet with clients, conduct research), you can deduct your mileage. The 2024 standard mileage rate is 67 cents per mile. Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, insurance, depreciation) if it results in a larger deduction. Keep a detailed mileage log!

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 with your Form 1040. The good news is you only pay self-employment tax on 92.35% of your net earnings from self-employment. Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040.

Closing Tip for Indiana 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 freelance taxes and ensure you're taking advantage of all available deductions. Good luck with your writing and your taxes!