How to File Your Individual Income Tax Return

Last April, I got a panicked DM from a freelancer who'd been crushing it all year, $180K in revenue, dream clients, the whole nine yards. But there was one problem: she hadn't kept a single receipt, had no idea where to send her individual income tax return, and tax day was 72 hours away.

She ended up paying an accountant $3,500 in rush fees to sort out her mess. Ouch.

Filing your individual income tax return as a freelancer doesn't have to be a nightmare. But most freelancers treat taxes like that dental appointment they keep postponing, until the pain becomes unbearable.

I've been filing my own taxes for nearly a decade now, and I've learned that the freelancers who stress the least about tax season are the ones who understand the basics and set up simple systems.

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Step 1: Know When You Actually Need to File

Do you even need to file a tax return?

If you're making money as a freelancer, the answer is almost always yes. You need to file if you meet certain income thresholds. For most self-employed freelancers in 2025, if you earned $400 or more from your freelance work, you're required to file.

Look at your total income from all sources, your freelance gigs, any part-time employment, rental income, investment earnings, or anything else that brought in cash. Add it all up. If you're hitting that threshold, it's time to file.

And if you're wondering about the best business structure for your freelance income, check out this guide on do I need an LLC for freelance work. The right structure can save you thousands in taxes.

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Step 2: Get Your Paperwork Together (Don't Wait Until April)

This is where most freelancers screw up.

They wait until March or early April to start gathering documents, then realize they're missing half their receipts and can't remember which expenses were business-related versus personal.

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Income Documents:

• Form W-2 if you have any traditional employment
• Form 1099-NEC from clients (this shows your freelance income)
• Form 1099-DIV or 1099-INT for investment income
• Any other income documentation

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Expense Records:

• Receipts for business expenses (software, equipment, office supplies)
• Home office expenses if you claim that deduction
• Professional development costs
• Travel and meal receipts for business purposes
• Health insurance premiums (huge deduction for freelancers)

I keep a simple folder in Google Drive labeled "2025 Tax Stuff" and dump everything in there as it comes. No fancy system needed. Just consistent execution.

The IRS recommends keeping your tax records for at least seven years, so don't trash everything after you file. You never know when you might need to reference something.

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Step 3: Understand Your Tax Forms (The Ones That Actually Matter)

When you're filing your individual tax return, you'll use Form 1040, this is the main form for individual income taxes.

But here's where freelancing gets different from regular employment: you'll also need Schedule C to report your business income and expenses. This is where you show the IRS how much you made and what it cost you to make it.

If you made over $400 in self-employment income, you'll also file Schedule SE to calculate your self-employment tax. Yes, this is the painful one where you realize you're paying both the employee AND employer portion of Social Security and Medicare taxes. It sucks, but it's part of the deal.

This is exactly why so many freelancers I know use Collective.com to handle their tax preparation. When you're dealing with multiple forms and trying to maximize deductions, having experts who specialize in freelancer taxes can save you way more than they cost.

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Step 4: Max Out Your Deductions and Credits

This is where filing your individual tax return gets interesting, and where you can actually save serious money.

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Deductions Freelancers Often Miss:

The home office deduction is huge if you work from home. You can deduct a portion of your rent, utilities, and internet based on the square footage of your dedicated workspace.

Health insurance premiums are fully deductible for self-employed individuals. If you're paying $600/month for insurance, that's $7,200 you can deduct from your income.

Retirement contributions to a SEP-IRA or Solo 401(k) are not only deductible but can lower your taxable income significantly. I maxed mine out last year and saved over $8K in taxes.

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Credits Worth Knowing:

The Saver's Credit gives you a tax credit (not just a deduction) if you contribute to a retirement plan. For 2025, singles with adjusted gross income under $39,500 and married couples filing jointly under $79,000 may qualify.

If you paid student loan interest, you can deduct up to $2,500. Every bit helps when you're trying to optimize your tax situation.

Work-related expenses like industry subscriptions, online courses, and professional memberships are all deductible. That $2,000 you spent on marketing courses? Write it off.

Here's where working with a service like Collective tax specialists really pays off. Their team knows every deduction available to freelancers and can spot savings opportunities you'd never find on your own. Collective members save an average of $10,000 per year on their business taxes, and that's not an accident.

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Step 5: Decide How to Actually File

Now that you know what you need, let's talk about how to file your individual income tax return. You've got several options:

• Free File Programs: If your adjusted gross income is below a certain threshold (check the IRS website for current limits), you can use IRS Free File software. It's solid for simple returns but might not give you all the guidance you need as a freelancer.
• Tax Preparation Software: Programs like TurboTax or H&R Block can walk you through the process and help identify deductions. They'll cost you anywhere from $100-$300 depending on your needs, but they're generally user-friendly.
• Tax Professionals: This is where services like Collective.com become game-changers for freelancers. Instead of spending hours trying to figure out Schedule C and self-employment tax, you have actual tax professionals handling everything. They know exactly where to send your individual income tax return and ensure you're not leaving money on the table.

The platform handles your entire tax situation, from quarterly estimates to year-end filing, and their technology makes it seamless. You're not just getting software; you're getting a whole finance team.

If you're making solid freelance income (typically $60K+), the tax savings alone usually pay for the service multiple times over. Plus, you get back all those hours you would've spent stressing over tax forms.

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Step 6: Don't Miss the Deadlines

The standard deadline for filing individual tax returns is April 15th. Mark it in your calendar. Set multiple reminders. Tattoo it on your forearm if you have to.

File earlier rather than later.

Early filing protects you from tax-related identity theft, which is becoming more common. Plus, if you're getting a refund, you'll get your money sooner. And if you owe money, you at least know how much you need to come up with.

Can't make the April deadline? You can file for an extension giving you until October to submit your return. But, and this is crucial, if you owe taxes, you still need to pay by April 15th to avoid penalties and interest. The extension is for filing the paperwork, not for paying what you owe.

If you're using Collective finance services, they'll help you stay on top of these deadlines and even calculate quarterly estimated tax payments so you're never scrambling in April.

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Making Tax Season Less Painful

Look, filing taxes as a freelancer will never be as fun as signing a new client or cashing a big check. But it doesn't have to be the stress-fest most freelancers make it.

The secret is having a system and sticking to it year-round. Keep your receipts organized. Track your expenses monthly. Set aside money for taxes with every payment you receive (I do 30% automatically).

And if you're serious about optimizing your tax situation while saving time, consider working with specialists who understand the freelance game. Collective.com exists specifically to take this burden off your plate while maximizing your savings.