 TITLE: How Are Freelancers Taxed? CONTENT: How to Avoid a Huge Freelance Tax Bill\n--------------------------------------\nSince an employer isn't withholding taxes, it's important to carefully track your tax obligations as a freelancer. Otherwise, you could face a bigger-than-expected tax bill. Here are five ways to avoid a nasty tax surprise if you earn freelance income.\n1.  Monitor your quarterly tax payments. The IRS normally expects you to make estimated tax payments before each quarterly deadline. If you don't, you face penalties and interest charges for missing a deadline or skipping payments altogether. Waiting until the next quarterly deadline or lumping all of your payments together at the end of the year doesn't pass muster with the IRS. Use IRS Form-1040 ES to calculate and make estimated tax payments.\n2.  Save for retirement. You can reap tax savings by contributing to a traditional IRA (individual retirement account) or Solo 401(k), or by setting up a SIMPLE IRA or SEP IRA for your freelance business.\n3.  Open a health savings account. A health savings account (HSA) coupled with a high-deductible health insurance plan can lower your tax burden. HSA contributions are tax-deductible.\n4.  Explore tax-saving options. Aside from tax deductions for HSA contributions, freelancers enjoy several tax-saving options. They include tax breaks for education expenses, business meals, business travel, use of your home or car for freelance work, purchases of office supplies and equipment, internet service and other utilities, and health insurance premiums.\n5.  Consider hiring an accountant. A professional may be able to help lower your tax bill by identifying tax deductions that you weren't aware of. For instance, the federal tax reform package passed in 2017 added a 20% deduction on what's known as qualified business income. This deduction applies to many self-employed people, such as sole proprietors and partners, but not all self-employed people. END