How to Handle Taxes as a Remote Worker in the U.S.

Remote work gives you freedom, but don’t forget about taxes. If you’re a digital nomad, freelancer, or full-time remote worker in the U.S., understanding your tax obligations is important. Miss this step and you could face penalties or miss out on savings. Here’s what you need to know to stay on top of your U.S. remote worker taxes.

What Remote Workers in the US Need to Know

Tax rules vary depending on how you make your money. W-2 employees have it easy. Their employer withholds taxes. If you work for yourself or freelance, you’re responsible for everything. The IRS doesn’t care if you work on the beach or in your basement. The income must be reported.

Taxes vary by state. Some charge taxes based on where you live. Others charge taxes based on where your business is located. If you move during the year, you may have to make payments in multiple places. Digital nomads who move between states will have to keep track of these issues themselves.

Foreign income adds another layer of complexity. The US taxes citizens worldwide, but certain quirks of the law, such as the Foreign Earned Income Exclusion (FEIE), can help. If you’re abroad for most of the year, you may be able to claim tax breaks.

Common Tax Mistakes to Avoid

Remote workers often fall into the same tax traps. Here are some to watch out for:

• Ignoring self-employment tax. Freelancers must pay the full 15.3% for Social Security and Medicare, unlike W-2 employees who split those expenses.
• Missing estimated payments. If you expect to owe more than $1,000, the IRS will require quarterly payments. Missed deadlines and penalties add up.
• Combining state taxes. Living in one state and working for a company in another can result in double tax liability.
• Forgetting deductions. Home office expenses, software, and health insurance can lower your taxable income.
• Filing late without a plan. Extensions give you more time to file your return, but not to pay it. Anything owed after April 15 will incur penalties.

Deductions You Might Be Missing

Home office expenses are a classic deduction. If you use part of your space for work, you can deduct expenses like rent, utilities, and internet. The simplified method offers $5 per square foot (up to 300 square feet). This simplifies the calculations.

Office supplies, software, and a new laptop may qualify. Keep receipts for anything used for business purposes. Travel expenses are also deductible. If you visit a client or coworking space, travel and food expenses may be deductible.

Health insurance premiums are often overlooked. Self-employed individuals can deduct them along with retirement contributions. A SEP IRA or Solo 401(k) can reduce taxable income while saving for the future.

Here’s a quick overview of common deductions:

When to File and Who Can Help

Understanding remote worker taxes in the U.S. requires understanding important IRS tax deadlines. While April 15 is standard for most, self-employed professionals must track quarterly payments:

• April 15 (Q1);
• June 15 (Q2);
• September 15 (Q3);
• January 15 (Q4).

Missing these deadlines can often be more costly for remote workers than traditional employees, usually due to self-employment penalties.

Extensions and Payment Rules

The IRS allows extensions to be filed until October 15, but this does not delay payments. For those managing remote worker taxes in multiple states or countries, late payments accrue interest. Digital nomads often face harsh consequences since their income sources may span multiple jurisdictions.

Finding Specialized Tax Help

Not all accountants understand the nuances of remote worker taxes in the U.S. Look for these experts:

• CPAs with remote work experience in multiple states.
• Enrolled agents familiar with the tax situations of digital nomads.
• International tax professionals for remote work abroad.
• Cost-effective filing solutions

The IRS Free File program helps those with incomes below a certain level. It’s useful for freelance taxes in 2025. Some states offer similar programs for remote workers. Nonprofits like VITA provide free self-employment tax assistance.

Remote work doesn’t mean tax-free. No matter what your industry, you need to stay organized. Track your income, save your taxes, and don’t forget about deductions. If this seems overwhelming, you’re not alone. Many remote workers struggle with it. But with the right information (and perhaps some professional help), you can file with confidence and save more money.