Web Developer Taxes in Montana - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Web Developer in Montana

Montana’s Big Sky Country offers a unique blend of opportunity and tranquility for web developers, but navigating the tax landscape as a self-employed professional requires careful attention. As an independent contractor, understanding both federal and Montana 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. Income exceeding $400 necessitates 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 Montana Handles Gig Worker Taxes

As a resident of Montana, a state income tax return is required, even if federal income tax liability is zero. Montana operates on a graduated income tax system, meaning the tax rate increases as income rises. For the 2025 tax year, Montana’s tax brackets are subject to adjustment for inflation, but currently range from 1% to 6.75%. The primary form for self-employed individuals to report income and calculate tax liability is Form 2 (Montana Individual Income Tax Return). Montana also allows for a deduction for federal income taxes paid, which can reduce your state tax burden. Furthermore, Montana has a business equipment tax credit available for certain qualifying equipment purchases, potentially offering significant savings for web developers investing in new technology. It’s important to note that Montana does not have a local income tax, simplifying the filing process compared to some other states. Staying informed about changes to Montana’s tax laws is vital; the Montana Department of Revenue provides comprehensive information and resources for taxpayers.

You can find more information and resources at the Montana Department of Revenue: https://revenue.mt.gov/

Key Tax Deductions for Home-Based Web Developers

• Home Office Deduction: To qualify for the home office deduction, the space must be used exclusively and regularly for business. “Exclusive use” means that portion of your home is only used for work – no guest rooms doubling as offices. “Regular use” implies consistent and frequent use for business activities. Taxpayers can choose between the simplified method, calculating the deduction at $5 per square foot (up to 300 square feet), or the actual expense method, which involves calculating the percentage of your home used for business and deducting a proportionate share of mortgage interest, rent, utilities, and other related expenses.
• Hardware & Software: The cost of computers, monitors, cameras, and essential software subscriptions (like Adobe Creative Cloud, web hosting, or development tools) directly related to your web development work are generally deductible. For larger purchases, depreciation or Section 179 expensing may be applicable.
• Internet & Phone Bill: If you use your internet and phone for both personal and business purposes, you can deduct the percentage attributable to business use. Maintaining a log of business-related usage is recommended to substantiate this deduction.

Note on Mileage: As a home-based worker, mileage deductions are less common. However, any travel directly related to client meetings, attending industry events, or procuring supplies for your business 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 when working for a traditional employer. You are responsible for paying both portions as a self-employed individual. However, you can deduct one-half of your self-employment tax from your gross income when calculating your adjusted gross income (AGI).