The IRS treats you differently when you work for yourself. QBI deduction, estimated taxes, Schedule C, and strategies to keep more of what you earn.
“As an employee, the government takes your taxes before you see your paycheck. As a freelancer, you get to write a big check yourself four times a year. Fun!”
The QBI (Section 199A) deduction lets qualifying pass-through business owners deduct up to 20% of their business income. Eligibility phases out at $191,950 (single) / $383,900 (married). If you're under the threshold, you almost certainly qualify.
Estimated taxes are due quarterly: April 15, June 15, September 15, January 15. Use IRS Form 1040-ES. Underpayment penalty applies if you owe more than $1,000 at tax time — avoid by paying 100% of last year's tax (110% if AGI > $150k).
Schedule C deductions: home office (simplified $5/sq ft up to 300 sq ft, or regular method), vehicle mileage ($0.70/mile for 2025), health insurance premiums (deduct above-the-line), retirement plan (SEP IRA up to 25% of net earnings).
Entity structure matters: Sole proprietorship (simplest, most exposure), LLC (liability protection, pass-through), S-Corp (QBI + reasonable salary strategy — saves on SE tax above ~$60k net income).