Article Content (Updated for 2025 Law):

The rules for self-employed taxes just got a major overhaul with the passage of The One, Big, Beautiful Bill. While the basics remain—you still owe federal income tax and self-employment tax—the way it’s calculated and deducted is now more favorable than ever for freelancers, gig workers, and business owners.

💼 What’s the Same:

• You still report income and expenses on Schedule C.

• You still pay self-employment tax (15.3%) using Schedule SE.

• You still need to make quarterly estimated payments unless your W-2 withholding covers your tax liability.

🔥 What’s New Under the Beautiful Bill:

1. New Above-the-Line SE Tax Deduction

   On top of the existing 50% deduction, you now get a 25% bonus deduction for self-employment tax paid. That’s 75% of your SE tax now deductible, reducing your adjusted gross income significantly.

2. Higher Safe Harbor Thresholds

   To avoid estimated tax penalties, your payments must now equal:

   • 93% of your current-year tax, OR

   • 100% (or 110%) of last year’s tax, same as before

     This allows more room for unexpected income surges without risking IRS penalties.

3. 5-Day Grace Period on Quarterly Payments

   Estimated tax payments are still due:

   • April 15

   • June 15

   • September 15

   • January 15

     But the IRS now offers a 5-business-day grace window before penalties kick in.

4. Simplified “EZ Schedule C” for Freelancers

   If you earn under $250,000 in Schedule C income, you can use the new EZ Schedule C, which integrates directly with platforms like Zoho Expense. No more spreadsheet headaches.

📊 Use Zoho Expense to Track Everything Automatically

To stay compliant—and save more—Zoho Expense should be your go-to:

• Record income and expense transactions in real time.

• Categorize by IRS-approved categories (e.g., “Home Office”, “Professional Fees”, “Supplies”, "Marketing").

• Upload receipts, 1099s, and IRS confirmations.

• Tag payments like “Q2 Estimated Tax” and set quarterly reminders.

• Export directly into your tax folder or EZ Schedule C preparation file.

With this setup, you’ll always have IRS-ready documentation and real-time visibility into what you owe and when.

⚠️ Avoid Penalties With These Pro Moves:

• Use the 93% safe harbor rule to avoid underpayment penalties.

• Take full advantage of the new 75% self-employment tax deduction.

• File early using EZ Schedule C if eligible.

• Set Zoho alerts for the 5-day grace window so you never miss a payment deadline.