How to handle taxes for Self Employment as a freelance artist with low income

Thank you so much for breaking this down! I didn't realize the $400 threshold for self-employment tax, that's super helpful. Schedule C and Schedule SE - got it. Do I need to keep track of every single sale I make, even small commissions like $20-30? And what counts as a business expense for a digital artist? Would my drawing tablet, software subscriptions, and maybe part of my internet bill count?

Yes, you should track every sale you make, no matter how small. The IRS requires reporting all income. A simple spreadsheet with date, client name, and amount works well - and many digital payment platforms will provide year-end summaries too. For business expenses, you're absolutely on the right track. Your drawing tablet, digital art software subscriptions, online portfolio fees, art reference materials, portion of internet used for business, art education/courses, and even marketing costs like business cards or website hosting can all be legitimate business expenses. Just make sure to keep receipts and only deduct the business portion of mixed-use items like internet.

Does it work well for artists specifically? I've tried using regular tax software before and it never seemed to understand how to categorize my art sales and expenses properly. Some were commissions, others were from online stores, and others from conventions.

I'm skeptical about these tax services... Can it actually help with the quarterly estimated payments for next year? That's my biggest struggle - I never know how much to send in each quarter since my freelance income is so irregular.

It absolutely works for artists! I'm actually a graphic designer and illustrator myself. It correctly handled my mix of commission work, passive income from print-on-demand sites, and even my sporadic teaching gigs. It properly categorized all my different income streams and knew exactly which expenses were deductible for creative professionals. Regarding quarterly payments, yes that's actually one of its best features. It analyzes your income patterns from previous periods and helps you estimate appropriate quarterly payments based on your actual earning trends. It even sends reminders before each quarterly due date and adjusts the suggested payment amount based on your recent earnings. I was always underpaying or overpaying before, but this made it much more accurate.

Wait, how does this actually work? Don't you still have to call the IRS directly? I'm confused about how a third-party service can somehow get you through the IRS phone queue faster.

Sounds kinda sketchy tbh. Why would I pay someone else to call the IRS when I can just do it myself for free? And what if the IRS asks for personal info? Do these people hear all your private tax details?

The service works by using technology to navigate the IRS phone system and wait in the queue for you. When an agent finally answers, Claimyr calls you and connects you directly to that IRS agent. You don't have to sit listening to hold music for hours! You absolutely talk directly with the IRS yourself. Claimyr isn't on the call at all - they just handle the waiting part. Once you're connected, it's just you and the IRS agent having a private conversation. They never hear any of your personal tax information. I was concerned about the same thing before I used it, but it's completely secure and they don't access any of your tax details.

I had no idea about the Earned Income Tax Credit! That's really good to know - I definitely need to look into that. The 20-25% savings tip is smart too. Do you think I need to worry about quarterly payments for 2025 if I'm only expecting to make around $5-6k? Or is there some threshold where it becomes required?

You typically need to make quarterly estimated tax payments if you expect to owe at least $1,000 in taxes when you file your return. At $5-6k in self-employment income, you'll owe roughly $800-900 in self-employment tax alone, plus any income tax. So you'll probably be right around that threshold. To be safe, I'd recommend making quarterly payments for 2025. They're due April 15, June 15, September 15, and January 15 (of the following year). Even if you don't make the exact right amount, showing that you made an effort to pay quarterly helps avoid penalties. Plus, it's much easier to pay in smaller chunks throughout the year than face one big bill at tax time!

This is so important! I'm in California and was shocked at how different the state requirements were from federal. Make sure you check your specific state tax website.

This is such great advice about VITA! I had no idea there were free tax prep services specifically for people in our income bracket. That sounds way less intimidating than trying to figure out all the forms myself or paying for expensive tax software when I'm barely making any money yet. Do you know if they can also help with setting up quarterly payments for next year? I'm still confused about how to estimate what I should be paying each quarter when my income is so unpredictable as an artist - some months I might make $800, other months maybe only $100. Also, did they help you understand which art-specific expenses you could deduct? I'm never sure what counts as a legitimate business expense versus just personal purchases I happen to use for art sometimes.

Yes, VITA volunteers can definitely help with quarterly payment planning! When I went, they showed me how to use Form 1040ES to calculate estimated payments and explained the safe harbor rule - basically, if you pay 100% of what you owed last year (or 110% if your income was over $150k), you won't get penalized even if you underpay slightly. For irregular income like yours, they taught me to base quarterly payments on a conservative estimate and then adjust as the year goes on. So if you think you might make $5,000 total, calculate payments based on that, but if you're having a great year and hitting $8,000 by September, you can increase your January payment to catch up. Regarding art expenses, they were really helpful with this! They explained the key test is whether the expense is "ordinary and necessary" for your business. Your drawing tablet, software subscriptions, art supplies, portfolio website, business cards, art books/references, and even a portion of your home internet are usually deductible. The tricky part is mixed-use items - like if you use your computer 70% for art business and 30% personal, you can only deduct 70% of it. The volunteers see freelance artists all the time, so they know exactly which expenses typically qualify and which ones the IRS might question. It's so much better than guessing!

This is such important advice that I wish I'd known when I first started! I definitely learned the hard way about tracking everything. I made the mistake of not reporting some small Etsy sales my first year because I thought they were "too small to matter" - turns out the IRS doesn't see it that way! One thing I'd add is to screenshot or save confirmations from payment apps like Venmo or CashApp, especially if the payment descriptions are vague. I had a client pay me through Venmo with just "thanks!" as the description, and months later I had no idea what that $150 payment was for. Now I always ask clients to include something like "logo design" or "portrait commission" in the payment note. The bartering point is so good too - I never would have thought of that as taxable income when I was starting out!