Web Developer Taxes in Indiana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Web Developer in Indiana

Indiana’s growing tech scene offers web developers exciting opportunities, but navigating the tax landscape as a freelancer or independent contractor requires careful planning. As a self-employed web developer, understanding your federal and state tax obligations is crucial for financial success.

The IRS requires all self-employed individuals, including web developers, to report income and expenses on Schedule C (Profit or Loss From Business) with Form 1040. Furthermore, earnings exceeding $400 necessitate the payment of self-employment tax, covering both Social Security and Medicare contributions. Accurate record-keeping throughout the year is essential to maximize deductions and ensure compliance.

How Indiana Handles Gig Worker Taxes

As a resident of Indiana, a state income tax return is required regardless of whether you are a full-time employee or self-employed. Indiana operates under a flat income tax rate, currently at 3.15% for the 2025 tax year. This means all taxable income is subject to the same rate. Self-employed individuals in Indiana use Form IT-1040, Indiana Resident Income Tax Return, to report their income, deductions, and calculate their state tax liability. A key component for web developers is reporting income from Schedule C on your IT-1040. Indiana also requires the filing of Schedule IN-SE, Self-Employment Income, to calculate the state self-employment tax. This tax is calculated as 3.15% of your net self-employment income. Unlike the federal self-employment tax, there is no separate employer portion. Estimated tax payments are generally required quarterly if your expected tax liability is $1,000 or more. Failing to make timely estimated payments can result in penalties. Indiana’s Department of Revenue provides comprehensive resources and online filing options for taxpayers. It’s important to note that Indiana conforms to many federal deductions, but it’s always best to verify specific rules with the state.

For more information and resources, please visit the Indiana Department of Revenue: https://www.in.gov/dor/

Key Tax Deductions for Home-Based Web Developers

• Home Office Deduction: The home office deduction allows web developers to deduct expenses related to the portion of their home exclusively and regularly used for business. “Exclusive use” means that space is only used for work; a dining room table used for both meals and coding doesn’t qualify. “Regular use” means consistent and frequent use for business activities. Taxpayers can choose between the simplified method ($5 per square foot, up to 300 square feet) or the actual expense method (calculating a percentage of mortgage interest, rent, utilities, etc., based on the square footage used for business).
• Hardware & Software: The cost of computers, monitors, cameras, and essential software subscriptions (like Adobe Creative Cloud, web hosting, or development tools) are generally deductible as business expenses. For items with a useful life of more than one year, depreciation or Section 179 expensing may apply.
• Internet & Phone Bill: If a portion of your internet and phone service is used for business, you can deduct the business-use percentage. For example, if 75% of your internet usage is for client work, you can deduct 75% of the bill.

Note on Mileage: As a home-based worker, mileage deductions are less common. However, any travel to meet clients, attend industry events, or run business-related errands can be claimed using the standard mileage rate or actual expenses.

The 15.3% Self-Employment Tax Explained

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. This tax is essentially the equivalent of the employer and employee portions of these taxes for traditional employees. You receive credit for one-half of the self-employment tax on Form 1040.