Getting Started as a Freelancer
Congratulations on going freelance. The four steps below are the essential foundation every new freelancer needs — do them in order and you will avoid the most common mistakes.
Open a Dedicated Business Bank Account
Separating your personal and business finances is the single most important step you can take. It makes bookkeeping dramatically easier, protects you in an audit, and keeps you from accidentally spending tax money.
- ✓Open a free business checking account (Relay and Mercury are great options)
- ✓Never mix personal and business transactions
- ✓Set aside 25-30% of every payment for taxes immediately
Choose Accounting Software
You need a system to track income and expenses from day one. Good accounting software makes filing your taxes much easier and helps you catch deductible expenses throughout the year.
- ✓For simple freelancing, Wave is free and capable
- ✓QuickBooks Self-Employed automatically tracks mileage and separates expenses
- ✓FreshBooks is best if you invoice clients regularly
Understand Quarterly Estimated Taxes
As a freelancer, no one withholds taxes from your paychecks. You are responsible for paying estimated taxes four times a year. Miss these and you will owe a penalty on top of your tax bill.
- ✓You must pay quarterly if you expect to owe $1,000+ for the year
- ✓2026 deadlines: April 15, June 16, Sept 15, Jan 15, 2027
- ✓A safe approach: set aside 25-30% of every invoice payment
What to Do With Your First 1099
A 1099-NEC is the form clients send you when they paid you $600 or more in a year. It is not a tax bill — it is just a record of income. But yes, you need to pay taxes on it.
- ✓You owe taxes on ALL freelance income, even if you do not receive a 1099
- ✓Report 1099 income on Schedule C of your tax return
- ✓You can deduct business expenses to reduce the taxable amount
- ✓If you owe $1,000+ on your first return, set up quarterly payments now
New Freelancer Checklist
Next Steps
Tax Information Notice
This content is for informational and educational purposes only. It does not constitute tax, legal, or financial advice. Tax laws change frequently. Always consult a qualified CPA or Enrolled Agent for your specific situation.