Freelance Writer Taxes in South Dakota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in South Dakota?

Yes, your income as a freelance writer is taxable, but the situation is simpler in South Dakota than in most states. While South Dakota does not have a state income tax, you are still responsible for federal income tax and self-employment tax on your earnings. 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 schedule determines your net profit (income minus expenses), which is then added to your other income to calculate your adjusted gross income (AGI) and ultimately, your federal income tax liability.

South Dakota Specifics: Because South Dakota has no state income tax, you won’t file a state income tax return. However, your federal obligations remain the same as for freelancers in any other state.

Top Tax Write-offs for Freelance Writers

As a freelance writer, you have several opportunities to reduce your taxable income through legitimate business deductions. Here are a few key ones:

• 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. The IRS offers a simplified method based on square footage, or you can calculate actual expenses.
• Software & Subscriptions: Costs for writing software (like Scrivener, Grammarly Premium), editing tools, plagiarism checkers, and subscriptions to research databases are generally deductible.
• Computer & Equipment: You can deduct the cost of your computer, printer, and other equipment used for your writing business. For items with a useful life of more than one year, you’ll likely need to depreciate the cost over several years, or you may be able to use Section 179 deduction or bonus depreciation to deduct the full cost in the year of purchase (subject to limitations – consult IRS guidance).
• Mileage & Vehicle Expenses: When you drive for work – to meet clients, conduct research, or attend conferences – you can deduct your mileage. For 2024, the standard mileage rate is 67 cents per mile (verify the final official rate from the IRS). Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, insurance, depreciation), but mileage is often simpler.

The 15.3% Self-Employment Tax Surprise

Many freelancers are surprised to learn about self-employment tax. When you work for an employer, they pay half of your Social Security and Medicare taxes, and you pay the other half. As a freelancer, you are both the employer and the employee, so you’re responsible for the full 15.3% (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 that 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. You only pay self-employment tax on profits exceeding $400.

Closing Tip for South Dakota Residents

Being a freelancer in South Dakota offers the benefit of no state income tax, but diligent record-keeping is crucial for maximizing your federal deductions and accurately calculating your self-employment tax. Consider using accounting software or working with a tax professional to ensure you’re compliant and taking advantage of all available tax benefits. Don't hesitate to consult the IRS website (irs.gov) for the most up-to-date information and resources.