Graphic Designer Taxes in Vermont - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Graphic Designer income taxable in Vermont?

Yes, absolutely. As a graphic designer operating as an independent contractor (or sole proprietor), your income is taxable at both the federal and Vermont state levels. The IRS considers graphic design income earned as business income, and you'll report this on Schedule C (Profit or Loss from Business) as part of your Form 1040 federal income tax return. Schedule C allows you to deduct business expenses, reducing your taxable income.

Vermont has a graduated income tax system. This means the tax rate you pay increases as your income increases. You'll use Vermont Form INC-100 to calculate your Vermont income tax liability. Your federal Adjusted Gross Income (AGI), calculated after deducting items like self-employment tax and certain above-the-line deductions, is the starting point for calculating your Vermont income tax. Vermont also allows for itemized deductions similar to the federal level, which can further reduce your taxable income. Vermont tax brackets and rates are subject to change annually, so it's important to consult the Vermont Department of Taxes website for the most up-to-date information.

Top Tax Write-offs for Graphic Designers

• Software & Subscriptions: Costs for design software like Adobe Creative Cloud, Affinity Suite, or other tools essential to your work are fully deductible. This includes monthly subscription fees or one-time purchases.
• Computer & Equipment: You can deduct the cost of your computer, monitor, printer, drawing tablet, and other equipment used for your graphic design 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 utilize Section 179 deduction or bonus depreciation to deduct the full cost in the year of purchase (subject to limitations – consult a tax professional).
• 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, but you must keep detailed records.
• 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 or mortgage interest, utilities, and home insurance. There's a simplified method available as well.

The 15.3% Self-Employment Tax Surprise

As an independent contractor, 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, and it's currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare). You'll calculate this on Schedule SE (Self-Employment Tax) and report it with your Form 1040. The good news is you can deduct one-half of your self-employment tax from your gross income, which reduces your AGI.

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

Closing Tip for Vermont Residents

Vermont offers various credits and deductions beyond the federal level. Be sure to explore the Vermont Department of Taxes website (https://tax.vermont.gov/) to see if you qualify for any additional savings. Keeping accurate records of your income and expenses throughout the year will make filing much easier. Consider using accounting software or working with a tax professional to ensure you're maximizing your deductions and complying with all applicable tax laws. Good luck, and happy designing!