Graphic Designer Taxes in Tennessee - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Graphic Designer income taxable in Tennessee?

As a graphic designer operating as an independent contractor (freelancer) in Tennessee, your income is subject to federal income tax, even though Tennessee has no state income tax. You’ll report your income and expenses using Schedule C (Profit or Loss from Business), which is filed with your personal federal income tax return (Form 1040). This schedule allows you to deduct business expenses from your gross income, arriving at your net profit, which is then added to your other income when calculating your overall tax liability.

Tennessee Specifics: The good news is Tennessee does not have a state income tax on wages or self-employment income. You won’t file a state income tax return. However, this doesn’t mean you avoid all state-level taxes – you’ll still be responsible for sales tax if you sell tangible personal property, and potentially other business taxes depending on your business structure and local regulations.

Top Tax Write-offs for Graphic Designers

Maximizing your deductions is key to minimizing your tax bill. Here are some common write-offs for graphic designers:

• Software & Subscriptions: Costs for design software like Adobe Creative Cloud (Photoshop, Illustrator, InDesign), font subscriptions, stock photo services, and project management tools are generally fully deductible as business expenses.
• Computer & Equipment: You can deduct the cost of your computer, monitor, printer, scanner, drawing tablet, and other essential equipment. For items with a useful life of more than one year, you'll likely need to depreciate the cost over several years, or potentially use Section 179 deduction or bonus depreciation to deduct a larger portion in the first year (consult with a tax professional for eligibility).
• 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, such as a portion of your rent/mortgage, utilities, and home insurance. There's a simplified method based on square footage, or a regular method requiring detailed calculations.
• Mileage & Transportation: When you drive for business purposes (meeting with clients, picking up supplies), you can deduct mileage. For 2024, the standard mileage rate is 67 cents per mile (verify the final IRS rate at IRS.gov). Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, insurance, depreciation), but mileage is often simpler.

The 15.3% Self-Employment Tax Surprise

As a self-employed individual, you're both the employer and the employee. This means you're responsible for paying both the employer and employee portions of Social Security and Medicare taxes. This is known as Self-Employment Tax. You'll calculate this on Schedule SE (Self-Employment Tax). The combined rate is 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You only pay self-employment tax on profits exceeding $400. Importantly, you can deduct one-half of your self-employment tax from your gross income when calculating your adjusted gross income (AGI) on Form 1040.

Closing Tip for Tennessee Residents

Congratulations on living in a state with no income tax! However, don’t let that lull you into complacency regarding your federal tax obligations. Keep meticulous records of all income and expenses throughout the year. Consider using accounting software or working with a qualified tax professional to ensure you’re taking all eligible deductions and complying with all IRS regulations. Proper planning and organization will save you time, money, and potential headaches during tax season.