There are a lot of upsides to freelancing!

You have more control over your workload and schedule than if you worked a traditional job. You can set your own pay rates. You have more freedom to choose gigs that interest you, as opposed to being stuck with whatever your employer sends your way. You can pursue a variety of projects, so you don’t get bored doing the same thing again and again and again. If you work from home, you don’t even have to put on pants.

But there’s at least one definite downside to freelancing: taxes. As a traditional employee, you don’t bear much of the tax preparation burden. Your social security and medicaid taxes are taken out of your pay before you even get your paycheck. But as a freelancer, figuring out what to pay Uncle Sam, and when, is all on you. And you’ve got to do it. Not only is not filing taxes illegal; it can also lead to a host of consequences, from late penalties to arrest. (And don’t think you’re off the hook if you have a full- or part-time job and only supplement your income with freelance work; if you earn $400 or more a year from freelancing, you’ve got to pay taxes on that income.)

Unfortunately, filing taxes as a freelancer isn’t always easy. The US Tax Code is thousands of pages long, and it changes from year to year. There are a gazillion possible deductions (give or take), and jargon that makes it frustratingly difficult to understand what those deductions might actually be.

To help you navigate the tricky world of taxes, we talked to freelancers in a variety of fields about when and how they file, and how much they budget for it. Here’s what we learned.

"When's the new tax deadline?"

Tax Day Isn’t Only In April (Or July)

The IRS expects earners to use a “pay as you go” system. That’s why traditional employees see tax withholdings on every paycheck. Luckily, freelancers don’t have to file a tax form for every invoice they send out. Instead, freelancers have to pay taxes quarterly.

In order to “pay as you go,” you’ll need to estimate your income using Form 1040-ES. Your estimate doesn’t have to be right on the money, but you should keep in mind that if you end up earning more than you thought you would, you’ll owe the difference in taxes at the end of the year.

Though, if you make less than $2,000 from freelance work, any taxes that aren’t covered by your regular withholdings shouldn’t be too much; you’re probably safe simply reporting your freelance income on your regular tax return. Freelancers who also receive salaries and wages can avoid estimated tax payments by updating their W-4s so that their employers withhold more from their paycheck each month.

"How much of my income should I set aside for filing taxes?"

How much you’ll owe in income tax depends on lots of things, like your overall income, what state you live in, and your family size. But a good starting place is to set aside 25-30% of each freelance paycheck for taxes. And yes, that sounds like a lot. But there’s a reason for it. A big chunk of what you’ll be coughing up in those quarterly payments is the self-employment tax. The IRS expects every employee to put 7.65% of their earnings aside for FICA taxes (Social Security and Medicaid), and their employer to match that amount. As a freelancer, you’re both employer and employee, so you’re stuck with the entire 15.3% bill, hence the self-employment tax. (There’s a silver lining though. You can claim the employer portion of that as a deduction.)

"How do freelancers keep track of what income comes in?"

Of course, to set aside 25-30% of your income, you’ll need to keep track of what that income is. Figuring out how much money you bring in is relatively simple. It’s just a matter of maintaining a record of payments. You can also set up a separate bank or online payment account exclusively for freelance work; that way, your deposit history is also a record of your income. For those who aren’t great at staying organized (or who just don’t want to have a cluttered file cabinet), online services like Bill.com can not only send invoices to clients, but also let freelancers see all of the invoices they’ve sent out over a given time period.

The IRS has forms to help you stay on top of this, too. Any client who sends you more than $600 a year should send you a 1099-MISC form or a 1099-K if they pay you through a third party or online system like Venmo or PayPal (but be careful: clients don’t have to send you a 1099-K unless they pay you $20K or pay you 200 separate times, but you’re responsible for those taxes whether they send the 1099-K or not).

...And keep track of what expenses go out.

1099 forms and payment records only show your gross income. You’ll also need to keep track of your net income--that is, what you earn minus anything you pay out in order to earn it. That means keeping a record of everything you spend in order to freelance.

You can do this the old fashioned way, by saving receipts and tallying them up when you file each quarter. Using a separate freelancing account for any business expenses is also an option; you’ll be able to just look at your bank statement and add up your purchases. Online services and apps like Evernote and Smart Receipts let you scan and organize receipts.

The IRS lets you subtract the cost of doing business from your taxable income so long as it’s a business expense that’s “both ordinary and necessary.” You’ll use those receipts and records to help you figure out what deductions you’re eligible for. Some of the most common deductions freelancers claim are for home office space, advertizing, and travel, but there’s an almost infinite number of things that could potentially qualify. You’ll enter all of your income and expenses on your Schedule C form.

"Should I use a tax professional to help me file my taxes?"

If all this sounds complicated, that’s because it is. Which is why one of the best things a freelancer can do is hire a tax professional. At first, the cost might seem prohibitive. Nationally, the average cost for an accountant is about $40 an hour. One freelance writer we talked to pays their CPA between $400 and $475 each year. A freelance stylist pays hers $275 plus a filing fee. My CPA charges a flat fee of $150. But that cost is often worth it. A CPA or accountant will know more about what specific deductions you can qualify for, and can tell you exactly what documentation you’ll need to have on hand to make the claim. More deductions can be the difference between owing the government money at the end of the year and getting a tax return check.

And remember, I'm here to help you out, not encourage you to follow the capitalistic rules for no reason. However you choose to handle your taxes, just be sure to get it done. July 15 is getting closer every day.