Freelance Writer Taxes in Montana - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Montana?

Yes, absolutely. As a freelance writer in Montana, your earnings are subject to both federal and state income taxes. The IRS treats freelance income as business income, meaning you'll report it on Schedule C (Profit or Loss from Business) as part of your Form 1040. This schedule allows you to deduct business expenses, reducing your taxable income. You'll calculate your net profit (income minus expenses) on Schedule C, and that amount flows to your 1040.

Montana has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. For the 2024 tax year (filing in 2025), Montana’s tax brackets will determine your state income tax liability. You’ll use Form 2, Montana Individual Income Tax Return, to calculate and report your Montana income tax. Your federal Adjusted Gross Income (AGI) is a starting point for calculating your Montana taxable income, but Montana has its own adjustments and deductions.

Top Tax 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. This includes a percentage of your mortgage interest or rent, utilities, property taxes, and homeowner's insurance. 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 subscriptions to research databases are all deductible business expenses.
• Computer & Equipment: The cost of your computer, printer, desk, chair, and other equipment used for your writing business can be deducted. 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 & Vehicle Expenses: When you drive for work – to meet clients, conduct research, or go to conferences – you can deduct your mileage. For 2024, the standard mileage rate is 67 cents per mile (verify the final IRS rate at IRS.gov). Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, insurance, depreciation), but mileage is often simpler.

The 15.3% Self-Employment Tax Surprise

As 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% self-employment tax (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You report this on Schedule SE (Self-Employment Tax). The good news is you can deduct one-half of your self-employment tax from your gross income on Form 1040, reducing your overall tax liability. This tax applies to net earnings over $400.

Closing Tip for Montana Residents

Don't forget to plan for your Montana state income tax liability throughout the year. Consider making estimated tax payments quarterly to avoid penalties. Montana offers resources for taxpayers on their Department of Revenue website (revenue.mt.gov). Keeping accurate records of your income and expenses is crucial. Consulting with a qualified tax professional (like myself!) can help you maximize your deductions and ensure you're compliant with both federal and Montana tax laws.