Taxes for freelance designers

Whether you design logos, websites or product interfaces, freelance design income is self-employment income. Clients don't withhold tax, so you set it aside and pay quarterly.

Which forms you'll get

Clients who pay you directly by bank transfer or check send a Form 1099-NEC. Starting with payments made in 2026, a client or platform only has to send you a Form 1099-NEC once it pays you $2,000 or more in a year (it was $600), under the One Big Beautiful Bill Act. The threshold is set to adjust for inflation after 2026. Payments that reach you through a card processor, payment app or marketplace are reported on Form 1099-K instead, generally once they pass $20,000 and 200 transactions in a year under federal rules (some states use lower thresholds). That's why clients who pay through a card, PayPal or a freelance marketplace don't send a 1099-NEC for those payments.

Either way, every dollar is taxable whether or not you get a form. Your own records are what count.

Common write-offs

Software subscriptions: design tools, font licenses, stock photos and mockup libraries.
Computer, monitor, tablet and stylus (often deductible in full the year you buy them).
Portfolio site hosting, domain and website builder fees.
Freelance marketplace fees and payment processing fees.
Courses, conferences and books that keep your current skills sharp.
Home office, if you have a space used regularly and only for work. The IRS simplified method is $5 per square foot, up to 300 square feet.
Health insurance premiums you pay yourself (self-employed health insurance deduction), if you aren't eligible for an employer plan.
Retirement contributions to a SEP IRA or solo 401(k), which lower income tax (not self-employment tax).

How much to set aside

Designers tend to have low expenses, so profit is close to what clients pay. A common starting point is 25–30% of each payment, adjusted for your state. If you also have a salaried job, your freelance income stacks on top of it and you may need more.

Make it automatic

Quarterbird imports client payments from your bank, Stripe, PayPal, Venmo or Cash App and shows exactly what to save from each one, with quarterly reminders before every deadline.

Know your number for every payment.

Import from Venmo, Cash App, PayPal, Stripe, Square or your bank. No bank login required. Reminder before your trial ends.

Get the app Try the calculator

Frequently asked questions

Do I need to send a 1099 to a subcontractor I hire?

If you pay another freelancer $2,000 or more in a year for work for your business (for payments made from 2026), by a method other than a card or payment app, you generally need to file a 1099-NEC for them. Collect a W-9 before you pay.

Can I deduct my whole laptop?

If you use it only for work, generally yes, often all in the year you buy it. If you also use it personally, deduct only the business share.

Sources

Estimates and general information, not tax advice. Check with a tax professional for your situation.