Paying taxes as a freelancer can feel overwhelming — especially when you’re managing every part of your business yourself. Whether you live in Fairfax, VA, Washington D.C., or Maryland, understanding your freelance tax obligations can save you time, money, and unnecessary stress.
Freelancers don’t have taxes automatically withheld like traditional employees, so you’re responsible for estimating your taxes, tracking expenses, and filing correctly. With the right setup and strategy, you can reduce your tax bill, stay compliant, and focus more on your business.
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How to File Taxes as a Freelancer
The IRS classifies freelancers as self-employed, meaning you’ll report your income using Form 1040, along with Schedule C for your business income and Schedule SE for self-employment tax.
Before filing, choose the best business structure for your situation. The right structure can influence how much you pay in taxes and what deductions you qualify for.
Sole Proprietorship
This is the simplest and most common setup for freelancers. You report income directly on your personal return. There’s minimal paperwork, but no personal liability protection — your business and personal assets are legally the same.
Single-Member LLC
A Limited Liability Company (LLC) provides basic protection for your personal assets. You’ll still file your taxes like a sole proprietor unless you choose to be taxed as an S Corporation. Many Virginia and Maryland freelancers start as LLCs for the flexibility and legal protection.
S Corporation
An S Corp can help established freelancers save on self-employment taxes. You pay yourself a reasonable salary and take additional profits as distributions, which are not subject to Social Security and Medicare taxes. However, S Corps come with added administrative costs, such as payroll and annual filings.
C Corporation
A C Corp is rarely necessary for individual freelancers. While it offers strong liability protection, it also comes with complex reporting and double taxation — once on profits and again on dividends.
Paying Estimated Quarterly Taxes
Since freelancers don’t have tax withholding, you must make quarterly estimated tax payments to the IRS — and to your state, if applicable. These payments cover both income and self-employment taxes.
For 2026, the estimated tax payment deadlines are:
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April 15, 2026
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June 15, 2026
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September 15, 2026
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January 15, 2027
In Virginia, D.C., and Maryland, freelancers generally follow these same federal due dates. Staying on top of your estimated payments prevents IRS penalties and keeps your cash flow predictable.
Understanding Self-Employment Tax
Freelancers must pay self-employment tax — 15.3% of net earnings — to cover Social Security and Medicare contributions. This includes both the employer and employee portions.
However, if your business becomes profitable, forming an S Corporation can help lower this tax. You’ll pay self-employment taxes only on your salary, not on distributions. It’s one of the most effective ways freelancers can legally reduce taxes in Virginia and nearby states.
LLC vs. S Corp for Freelancers in VA, DC, and MD
Both LLCs and S Corporations offer liability protection, but they differ in taxation.
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LLC: Easier to set up, less maintenance, and flexible tax treatment. Great for part-time or newer freelancers.
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S Corp: Ideal for full-time or high-earning freelancers who want to save on self-employment taxes and pay themselves a salary.
In Virginia and Maryland, you can easily start as an LLC and later elect S Corporation status once your freelance income grows. D.C. freelancers can also benefit from S Corp tax elections, but local business franchise taxes still apply.
Should Freelancers Incorporate?
Yes — once your freelance business becomes steady and profitable, incorporation can be worth it. Creating an LLC or S Corp provides liability protection and potential tax savings.
For example, Virginia freelancers often register an LLC through the Virginia State Corporation Commission, while D.C. freelancers register with the Department of Licensing and Consumer Protection. In Maryland, registration is handled by the Department of Assessments and Taxation (SDAT).
Starting as an LLC keeps things simple, and converting to an S Corp later can help you save significantly on taxes while keeping your personal assets safe.
Common Tax Deductions for Freelancers
Freelancers in Virginia, D.C., and Maryland can take advantage of many tax deductions that lower taxable income. Some common write-offs include:
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Home office expenses: Deduct part of your rent, utilities, or internet used for business.
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Business travel: Flights, hotels, and meals for work trips.
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Office supplies and equipment: Computers, cameras, or other tools.
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Education and training: Online courses, workshops, or certifications.
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Professional services: Legal, accounting, and marketing help.
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Health and business insurance premiums.
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Website and advertising costs.
Accurate bookkeeping is key. Use accounting software or apps to track expenses and keep receipts. In Virginia and Maryland, maintaining digital records is accepted by tax authorities and simplifies your audit trail.
Tax Forms Freelancers Need
Freelancers must file several key forms to stay compliant:
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Form 1040: Your personal tax return.
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Schedule C: Business income and expenses.
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Schedule SE: Self-employment tax calculation.
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Form 1099-NEC or 1099-MISC: Issued by clients who paid you $600 or more.
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Form 1099-K: If you receive payments through PayPal, Stripe, or similar platforms.
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State filings: Each region has its own filing rules — Virginia (Form 760), Maryland (Form 502), and D.C. (Form D-40).
Filing on time with accurate records helps you avoid penalties and makes next year’s tax season much easier.
Staying Compliant Year-Round
Keeping up with your taxes throughout the year prevents surprises. Freelancers should:
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Record income and expenses monthly.
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Set aside 25–30% of income for taxes.
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Make quarterly estimated payments on time.
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Use professional bookkeeping support if needed.
Timely and accurate bookkeeping also helps you plan ahead. With clear financial data, you can identify deductions, plan for quarterly payments, and build tax strategies that reduce your year-end liability.
How NumberSquad Supports Freelancers in VA, DC, and MD
At NumberSquad, we help freelancers and self-employed professionals across Fairfax, Virginia, Washington D.C., and Maryland simplify tax season and keep their finances organized year-round.
Our team specializes in:
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Setting up LLCs and S Corporations for freelancers.
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Handling quarterly estimated tax payments and compliance.
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Providing cloud bookkeeping and expense tracking.
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Running S Corp payroll and filing shareholder taxes.
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Identifying every possible deduction to reduce your tax burden.
With NumberSquad, you’ll have a team that understands both federal and state tax rules — helping you stay compliant while maximizing your savings.
Take Control of Your Freelancer Taxes Today
Freelancing gives you freedom, but it also comes with financial responsibility. With the right structure, accurate bookkeeping, and a strong tax strategy, you can avoid penalties, lower your taxes, and grow confidently.
If you’re a freelancer in Fairfax, VA, Washington D.C., or Maryland, NumberSquad can guide you through every step — from setting up your business to filing your taxes on time.
Contact NumberSquad today to discover how expert bookkeeping and tax planning can save you money and make managing your freelance finances effortless.
