Freelance Writer Taxes in New Mexico - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in New Mexico?

Yes, absolutely. As a freelance writer in New Mexico, 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 a Schedule C (Profit or Loss From Business) attached to your Form 1040. This schedule allows you to deduct business expenses, reducing your taxable income.

New Mexico has a graduated income tax system. This means the tax rate you pay increases as your income increases. For the 2024 tax year (filing in 2025), New Mexico’s tax brackets will determine your state income tax liability. You’ll report your federal adjusted gross income (AGI) on your New Mexico state income tax return (Form N-11) and calculate your state tax based on the applicable brackets. It's important to note New Mexico also has non-refundable credits available, which can further reduce your tax liability. You can find the current tax brackets and forms on the New Mexico Taxation and Revenue Department website: https://www.tax.newmexico.gov/

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 available as well, based on square footage.
• Software & Subscriptions: Costs for writing software (like Scrivener, Grammarly), editing tools, plagiarism checkers, and subscriptions to research databases are all deductible business expenses.
• Computer & Equipment: The cost of your computer, printer, 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 limitations) 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 log of all business miles driven (e.g., to client meetings, research locations). You can also deduct parking fees and tolls. Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, etc.) but the standard mileage rate is often simpler.

The 15.3% Self-Employment Tax Surprise

Because you're self-employed, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called self-employment tax and is currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax) and include it with your Form 1040. The good news is you can deduct one-half of your self-employment tax from your adjusted gross income, which lowers your overall tax liability. Remember, self-employment tax applies to earnings over $400.

Closing Tip for New Mexico Residents

Don't underestimate the importance of accurate record-keeping! Keep detailed records of all your income and expenses throughout the year. This will make filing your taxes much easier and ensure you claim all the deductions you're entitled to. Consider using accounting software or working with a tax professional, especially given New Mexico’s graduated tax system. The New Mexico Taxation and Revenue Department offers resources and assistance to taxpayers; utilize them!