Web Developer Taxes in Vermont - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Web Developer in Vermont

Vermont’s thriving tech scene offers web developers a unique blend of rural beauty and remote work opportunities, but navigating the tax landscape requires careful attention. As a self-employed web developer in Vermont, understanding your federal and state tax obligations is crucial for financial health.

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 Vermont Handles Gig Worker Taxes

As a resident of Vermont, a state income tax return is required even if your federal tax liability is zero. Vermont operates on a graduated income tax system, meaning the tax rate increases as your 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 Coupon. Vermont’s tax rates for 2025 (based on current projections and subject to change) range from 3.45% to 8.75% depending on your filing status and income level. Furthermore, Vermont allows for certain deductions and credits that can reduce your overall tax burden, such as those related to childcare expenses or energy efficiency improvements. It’s important to note that Vermont conforms to many federal deductions, but there can be differences, so careful review is necessary. Vermont also has a use tax on out-of-state purchases, which may be relevant if you purchase software or hardware online from vendors outside of Vermont.

For detailed information and the latest updates on Vermont tax laws, please visit the Vermont Department of Taxes website: https://tax.vermont.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 used solely for your web development work – it cannot double as a guest room or family space. “Regular use” implies consistent and ongoing use for business purposes. You can calculate the deduction using the simplified method ($5 per square foot, up to 300 square feet) or the actual expense method, which requires calculating a percentage of your mortgage interest, rent, utilities, and other home-related expenses based on the business use of your home.
• 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 business are generally deductible. For larger purchases (over a certain threshold, currently $2,500), depreciation may be required.
• Internet & Phone Bill: If you use your internet and phone for both personal and business purposes, you can deduct the percentage of the expense attributable to your business. Maintain detailed records to support this calculation.

Note on Mileage: As a home-based worker, mileage deductions are less common. However, you can claim mileage for occasional trips to meet clients, attend industry events, or purchase supplies directly related to your business.

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 you are employed by someone else. 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).