Graphic Designer Taxes in South Dakota - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Graphic Designer income taxable in South Dakota?

As a graphic designer operating as an independent contractor or freelancer in South Dakota, your income is subject to federal income tax, even though South Dakota doesn’t have a state income tax. This means you’ll need to report your earnings and expenses to the IRS.

You’ll report your graphic design income and expenses on Schedule C (Profit or Loss From Business), which is filed along with your Form 1040. Schedule C allows you to deduct business expenses from your gross income, arriving at your net profit (or loss). It’s crucial to keep detailed records of all income received and expenses paid throughout the year.

South Dakota Specifics: The good news is you won’t be filing a state income tax return! South Dakota is one of the few states with no state income tax. However, this doesn’t exempt you from federal tax obligations. You are still responsible for paying federal income tax and self-employment tax on your profits.

Top Tax Write-offs for Graphic Designers

• Software & Subscriptions: Costs for design software like Adobe Creative Cloud (Photoshop, Illustrator, InDesign), font subscriptions, stock photo services, and any other software essential to your work are deductible.
• Computer & Equipment: You can deduct the cost of your computer, monitor, printer, scanner, drawing tablet, and other equipment used for your graphic design business. For larger purchases (over $2,500), you may need to depreciate the cost over several years, or potentially utilize Section 179 deduction (consult a tax professional for details).
• Mileage & Vehicle Expenses: If you drive for client meetings, to purchase supplies, or for other business-related purposes, 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, etc.) if it results in a larger deduction. Keep a detailed mileage log!
• Home Office Deduction: If you use a portion of your home exclusively and regularly for your graphic design business, you may be able to deduct expenses related to that space (rent/mortgage interest, utilities, insurance, etc.). There's a simplified method and a regular method for calculating this deduction.

The 15.3% Self-Employment Tax Surprise

Many self-employed individuals are surprised by 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 self-employed graphic designer, you are responsible for both portions. This combined tax is 15.3% (12.4% for Social Security and 2.9% for Medicare) on your net earnings.

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 on Form 1040, which helps reduce your overall income tax liability. The $400 earnings threshold applies – you only pay self-employment tax on profits exceeding $400.

Closing Tip for South Dakota Residents

Being a graphic designer in South Dakota offers the benefit of no state income tax, but diligent record-keeping is key to maximizing your deductions and accurately reporting your federal taxes. Consider using accounting software or working with a qualified tax professional to ensure you’re 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 forms.