Freelance Writer Taxes in North Carolina - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in North Carolina?

Yes, absolutely. As a freelance writer in North Carolina, your earnings are 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: The IRS considers your freelance writing income as business income. You'll report this income (and your expenses) on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. Schedule C allows you to calculate your net profit – your income minus your business expenses. Only your net profit is subject to income tax.
• North Carolina Taxes: North Carolina has a flat income tax rate. For the 2024 tax year (filing in 2025), the rate is 4.5%. This means you'll pay 4.5% of your taxable income (after deductions) to the state. You'll report your federal adjusted gross income (AGI) and any applicable deductions on North Carolina Form D-400. North Carolina generally follows federal rules regarding deductions, but there can be differences, so it’s important to stay informed.

Top Tax Write-offs for Freelance Writers

One of the biggest benefits of being a freelancer is the ability to deduct business expenses. Here are some key deductions 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.
• Software & Subscriptions: Costs for writing software (like Scrivener or Grammarly), editing tools, plagiarism checkers, project management software, and any relevant online subscriptions 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: When you drive for work-related purposes (e.g., meeting with clients, researching at the library), you can deduct mileage. For 2024, the standard mileage rate is 67 cents per mile. Keep a detailed log of your business miles. Alternatively, you can deduct actual car expenses (gas, oil, repairs, etc.), but the standard mileage rate is often more beneficial.

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 adjusted gross income (AGI) on Form 1040, which helps reduce your overall income tax liability. Self-employment tax applies to earnings over $400.

Closing Tip for North Carolina Residents

Navigating freelance taxes can be complex. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software or working with a qualified tax professional (like myself!) to ensure you're taking all the deductions you're entitled to and complying with both federal and North Carolina tax laws. Proactive tax planning can save you significant money and stress come tax season. Good luck with your writing and your taxes!