Freelance Writer Taxes in Vermont - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Freelance Writer in Vermont

Vermont’s vibrant literary scene and independent spirit make it an ideal location for freelance writers, but navigating the tax landscape requires careful attention. As a self-employed individual, understanding both federal and state tax obligations is crucial for financial success.

Freelance writers are considered self-employed by the IRS and are required to report all income earned on Schedule C (Profit or Loss from Business) when filing 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 Vermont Handles Gig Worker Taxes

As a resident of Vermont, a state income tax return is required regardless of income level. Vermont operates on a graduated income tax system, meaning the tax rate increases as income rises. For the 2025 tax year, Vermont utilizes Form INC-100, Individual Income Tax Return, as the primary form for self-employed individuals to report their income and calculate their state tax liability. Vermont also requires taxpayers to calculate and pay estimated taxes quarterly if they expect to owe $500 or more in state income tax. These payments are made using Form VT-ES, Estimated Income Tax Payment. Vermont’s tax rates for 2025 are projected to range from 2.8% to 8.75% based on income brackets, but these are subject to change. It’s important to consult the Vermont Department of Taxes website for the most up-to-date rates and forms. Vermont also allows for certain deductions and credits that can reduce your state tax burden, mirroring some federal deductions and offering unique state-specific benefits. Remember to factor in any Vermont-specific income adjustments when calculating your state tax liability. Detailed information and resources can be found on the Vermont Department of Taxes website: https://tax.vermont.gov/

Key Tax Deductions for Home-Based Freelance Writers

• Home Office Deduction: The home office deduction allows writers 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 writing doesn’t qualify. “Regular use” means the space is used consistently for work. Taxpayers can choose between the simplified method, a standard deduction of $5 per square foot of the home used for business (capped at 300 square feet), or the actual expense method, which requires calculating the percentage of the home used for business and deducting a proportionate share of mortgage interest, rent, utilities, and other related expenses.
• Hardware & Software: The cost of essential tools like computers, cameras, printers, and software subscriptions (such as Adobe Creative Cloud, Grammarly, or website hosting) directly related to your writing business are deductible. For items with a useful life of more than one year, depreciation or Section 179 expensing may apply.
• Internet & Phone Bill: If you use your internet and phone for both personal and business purposes, you can deduct the percentage of the expenses attributable to your writing work. Maintaining a detailed log of business usage is crucial 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, research, or other work errands can be claimed using the standard mileage rate or actual expenses. Keep a detailed mileage log for accurate record-keeping.

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 can deduct one-half of your self-employment tax from your gross income when calculating your adjusted gross income (AGI).