Freelance Writer Taxes in Vermont - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Freelance Writer income taxable in Vermont?

Yes, absolutely. As a freelance writer in Vermont, all income you earn is subject to both federal and Vermont state income taxes. The good news is, as a business owner, you can also deduct legitimate business expenses to reduce your taxable income.

Federal Taxes: 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). It's crucial to keep detailed records of all income received and expenses paid.

Vermont State Taxes: Vermont has a graduated income tax system. This means the tax rate you pay increases as your income increases. You’ll report your federal Adjusted Gross Income (AGI) on Vermont Form INC-100. Vermont then applies its own tax rates to determine your state income tax liability. The specific rates change annually, so refer to the Vermont Department of Taxes website (tax.vermont.gov) for the most up-to-date information. Your Schedule C net profit will directly impact your Vermont taxable income.

Top Tax Write-offs for Freelance Writers

Maximizing your deductions is key to minimizing your tax bill. Here are some common write-offs 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 & Vehicle Expenses: When you drive for work – to meet clients, conduct research, or go to the post office – you can deduct your mileage. For 2024, the standard mileage rate is 67 cents per mile (verify this on the IRS website: irs.gov). Alternatively, you can deduct actual vehicle expenses (gas, oil, repairs, insurance, etc.) but this usually results in a smaller deduction.

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%. This is broken down into 12.4% for Social Security and 2.9% for Medicare.

You'll calculate this tax on Schedule SE (Self-Employment Tax), which is filed with your Form 1040. The good news is you only pay self-employment tax on 92.35% of your net earnings. Also, you can deduct one-half of your self-employment tax from your gross income on Form 1040, reducing your overall tax liability.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for Vermont Residents

Vermont offers several resources for small business owners. I highly recommend visiting the Vermont Department of Taxes website (tax.vermont.gov) for detailed information on state tax laws, forms, and filing deadlines. Consider making estimated tax payments quarterly to avoid penalties. Keeping accurate records throughout the year will make tax time much smoother. Don't hesitate to consult with a qualified tax professional – like myself – for personalized advice tailored to your specific situation.