Freelance Writer Taxes in Kentucky - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Kentucky?

Yes, absolutely. As a freelance writer in Kentucky, 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.

Federal Taxes: You'll report your freelance writing income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This form determines your net profit (income minus expenses). It's crucial to keep meticulous records of all income received and all business-related expenses.

Kentucky State Taxes: Kentucky has a flat income tax rate of 4.0% for 2024. This means regardless of your income level, you'll pay 4.0% of your taxable income to the state. You'll report your federal adjusted gross income (AGI) and any applicable adjustments on Kentucky Form 740. Kentucky also allows for certain deductions that may differ from the federal rules, so it's important to consult the Kentucky Department of Revenue website (revenue.ky.gov) for the most up-to-date information.

Top Tax Write-offs for Freelance Writers

Freelance writers have several opportunities to lower their 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 Scrivener, Grammarly), editing tools, plagiarism checkers, project management software, and any relevant online subscriptions (research databases, stock photo sites) are deductible.
• Equipment: Computers, printers, desks, chairs, and other equipment used for your writing business are deductible. You can either deduct the full cost in the year of purchase (using Section 179 deduction, subject to limits) or depreciate the cost over several years.
• Mileage & Transportation: The 2024 federal standard mileage rate is 67 cents per mile for business use of your vehicle. Keep a detailed mileage log documenting the date, destination, business purpose, and miles driven for each trip. 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%. This is broken down into 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 can deduct one-half of your self-employment tax from your adjusted gross income (AGI) on Form 1040, which helps reduce your overall income tax liability. Self-employment tax applies to net earnings over $400.

Closing Tip for Kentucky Residents

Tax laws can be complex, and it's easy to miss deductions. As a Kentucky resident, remember to keep excellent records throughout the year – income, expenses, mileage logs, and receipts. Consider using accounting software designed for freelancers. Don't hesitate to consult with a qualified tax professional (like myself!) to ensure you're maximizing your deductions and complying with all federal and Kentucky tax regulations. Proactive tax planning can save you significant money and stress come tax season!