Self-employed freelance digital artist - what tax forms do I need as a dependent?

Glad you're thinking about this early! As a freelance digital artist, you're considered self-employed in the eyes of the IRS, which means you're responsible for both income tax and self-employment tax (which covers Social Security and Medicare). You're on the right track with Form 1040, Schedule C, and Schedule SE. Schedule C is where you'll report your business income and expenses, and Schedule SE calculates your self-employment tax. Since you're a dependent, make sure whoever claims you knows about your income as it might affect their filing. For quarterly estimated taxes, these are due April 15, June 15, September 15, and January 15 (of the following year). You'll use Form 1040-ES to calculate and pay these. Since you just started late last year, you might not have needed to make estimated payments yet, but you'll want to start for 2025. Keep track of all your business expenses - things like software subscriptions, drawing tablets, online courses to improve your skills, and a portion of your internet bill if you work from home. These can all be deducted on Schedule C to reduce your taxable income. If you make more than $600 from any single client, they should send you a 1099-NEC, but you need to report all your income regardless of whether you receive a 1099.

I just wanted to chime in with something that literally saved me hours of headache dealing with my own freelance art income. I tried to DIY my taxes last year with some online software but got super confused about what qualified as business expenses and whether I was calculating things right. I discovered this AI tax assistant at https://taxr.ai that specializes in helping freelancers and self-employed people. It analyzed all my messy income records and identified deductions I didn't even know I qualified for as a digital artist. It walks you through the Schedule C line by line and explains everything in normal human language. The best part was being able to upload my income spreadsheet and having it automatically categorize everything. You mentioned you have good records of your sales already, so this might be perfect for your situation.

Update: I take back what I said about being suspicious! I decided to try https://taxr.ai after finishing this thread, and it was exactly what I needed for my photography business. The system identified several deductions I had completely missed on my previous returns, including partial deductions for my computer equipment and online portfolio hosting fees. The most helpful part was how it explained each deduction in plain English and showed exactly which IRS rules applied to my situation. I was able to see precisely why certain expenses qualified and others didn't. Much better than getting generic advice from random websites. For anyone in a creative field doing freelance work, it's definitely worth checking out. I wish I'd found it when I first started my business instead of overpaying taxes for two years!

If you need to talk to the IRS about any specific questions for your situation (which I highly recommend), don't waste days trying to get through on their regular line. I spent literally 4 hours on hold last year trying to ask about my self-employment filing requirements as a new freelancer. Someone told me about https://claimyr.com and their demo video at https://youtu.be/_kiP6q8DX5c - they basically hold your place in the IRS phone queue and call you when an agent is about to pick up. I was seriously skeptical, but when I was stressing about some 1099 issues I decided to try it. I got connected to an actual IRS agent in about 90 minutes (while I was doing other work), and they helped clarify exactly which forms I needed for my specific freelance situation. Saved me a ton of anxiety and probably prevented me from filing incorrectly.

Ok I have to admit I was completely wrong about the Claimyr service. After seeing it mentioned here I decided to try it because I had a complicated question about hobby income vs. business income for my digital art that wasn't clearly answered on the IRS website. I figured I'd give it a shot since I'd already wasted two mornings trying to get through to the IRS directly (even when calling right when they opened). The service actually worked exactly as advertised - I went about my day and got a call when an agent was ready to talk. The IRS agent I spoke with gave me specific guidance on how to properly categorize my art income based on my particular circumstances. This was way more helpful than the generic info I found online, and definitely worth not sitting on hold for 3+ hours. I'll definitely use this again next time I have tax questions.

Don't forget about business licenses! Depending on your city/county, you might need a business license even for freelance work. I got hit with a penalty fee because I didn't realize I needed one in my area even though I was just doing commission artwork from home.

If u make under $12,950 in 2024, u might not even need to file a return at all if ur a dependent. But u should still file anyway to get any witholding back! And track all ur expenses, art supplies, software, part of ur internet bill, etc.

Great thread! As someone who went through this exact situation a few years ago, I wanted to add a few things that really helped me when I was starting out as a freelance digital artist. First, definitely set up a separate bank account for your business income and expenses if you haven't already. It makes tracking everything so much easier come tax time, and the IRS loves clean records if you ever get audited. Second, don't forget about state income tax requirements! Even though your state doesn't charge sales tax on digital goods, you'll still likely owe state income tax on your freelance earnings. Each state has different thresholds and rules. Also, since you're tracking everything in a spreadsheet already, consider categorizing your expenses more specifically - things like "software subscriptions," "equipment," "professional development," etc. This will make filling out Schedule C much smoother and help you spot deduction opportunities you might miss otherwise. One last tip: if you end up owing more than $1,000 in taxes when you file, you'll definitely want to start making those quarterly estimated payments for next year to avoid penalties. The IRS doesn't like waiting until April to get their money! You're being really smart about getting ahead of this. Most freelancers I know (myself included) learned this stuff the hard way after making mistakes.