Freelance Writer Taxes in Rhode Island - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Rhode Island?

Yes, absolutely. As a freelance writer in Rhode Island, your earnings are subject to both federal and state income taxes. The IRS considers you self-employed, meaning you're both the employee and the employer. This impacts how you report your income and pay taxes.

Federal Requirements: Schedule C 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 calculates your net profit (income minus expenses). It's crucial to keep detailed records of all income received and expenses paid throughout the year. The IRS expects you to demonstrate a reasonable effort to report all income.

Rhode Island Specifics: Graduated Income Tax Rhode Island 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), Rhode Island’s tax brackets will determine your state income tax liability. You’ll use Form RI-1040 to calculate your Rhode Island income tax. Your federal Adjusted Gross Income (AGI) is the starting point for calculating your Rhode Island taxable income, with certain adjustments allowed. Rhode Island also has a tax credit for taxes paid to other states, which may be relevant if you have income sourced from outside Rhode Island.

Top Tax Write-offs for Freelance Writers

As a freelancer, you can significantly reduce your tax burden by claiming eligible 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, cameras (if used for content creation), 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 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 mileage log documenting the date, destination, business purpose, and miles driven for each trip. You can also deduct parking fees and tolls.

The 15.3% Self-Employment Tax Surprise

Many freelancers are surprised to learn about self-employment tax. Because you're both the employee and employer, you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This combined tax is 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 only pay self-employment tax on 92.35% of your net earnings. The good news is you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for Rhode Island Residents

Don't wait until the last minute! Keeping meticulous records throughout the year is the best way to ensure an accurate and stress-free tax filing experience. Consider using accounting software designed for freelancers. Rhode Island’s tax laws can be complex, so if you’re unsure about any aspect of your tax obligations, consulting with a qualified tax professional (like myself!) is always a wise investment. Good luck, and happy writing!