Graphic Designer Taxes in Tennessee - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Graphic Designer in Tennessee

From crafting logos for Nashville’s vibrant music scene to designing marketing materials for businesses across the Volunteer State, graphic designers in Tennessee contribute significantly to the state’s creative economy. However, alongside artistic freedom comes the responsibility of managing taxes as a self-employed individual.

As a graphic designer operating as an independent contractor in Tennessee, all income earned must be reported to the IRS. This is typically done using Schedule C (Profit or Loss from Business) when filing your federal income tax return. Crucially, income exceeding $400 is subject to self-employment tax, which covers both Social Security and Medicare contributions.

How Tennessee Handles Gig Worker Taxes

Tennessee stands out as one of the few states with no state income tax. This means graphic designers won’t be filing a state income tax return based on their earnings. However, this does not exempt them from federal tax obligations. The absence of state income tax often leads Tennessee residents to focus solely on federal requirements, potentially overlooking crucial aspects of self-employment tax compliance. While Tennessee doesn’t tax income, businesses operating within the state are still responsible for sales tax collection if they sell taxable goods or services. Graphic design services themselves are generally not subject to Tennessee sales tax, but if a designer sells physical products (like printed brochures or branded merchandise), sales tax applies. It’s important to stay updated on any changes to Tennessee’s sales tax laws, as they can impact business operations. Furthermore, even without state income tax, estimated tax payments are still required quarterly to the IRS to avoid penalties. Tennessee does have franchise and excise taxes that may apply depending on the business structure, but these are less common for individual graphic designers. For detailed information on Tennessee tax laws and resources, please visit the Tennessee Department of Revenue.

Key Tax Deductions for Home-Based Graphic Designers

• Home Office Deduction: This deduction allows graphic designers to write off 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 spare bedroom dedicated solely to design work qualifies, while a corner of the living room used for both work and leisure does not. “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 essential tools like computers, graphic tablets, cameras, and design software (Adobe Creative Cloud, CorelDRAW, etc.) are deductible business expenses. For items with a useful life of more than one year, depreciation or Section 179 expensing may be used.
• Internet & Phone Bill: If a portion of your internet and phone usage is directly related to your graphic design business, you can deduct the business-use percentage. Keep detailed records of how these services are used for work purposes.

Note on Mileage: As a home-based worker, mileage deductions are less common. However, any travel directly related to client meetings, sourcing materials, or other work 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 is comprised of two parts: 12.4% for Social Security and 2.9% for Medicare. This tax is essentially the equivalent of the Social Security and Medicare taxes withheld from employees’ paychecks, but as a self-employed individual, you are responsible for paying both the employer and employee portions.