Working remotely has become a new normal for many professionals across the United States, especially since the COVID-19 pandemic. It gives you more comfort and freedom, but it can also bring a unique set of challenges while filing for taxes.
If you work remotely, it’s important to know what you need to do for taxes so you don’t get any surprises later.
In this article, we will break down the Tax Filing Guide for Remote Workers In US 2025. Which includes residency issues, deduction, state taxes, and more.
Who is Considered a Remote Worker?
A remote worker is someone who is working from a location outside the traditional office, most commonly from home. It can also include working from other places like cafes, co-working spaces, while traveling with proper internet access. Remote workers can be of different kinds and it can be:
- Full-time employee of some company, who works from home.
- A freelancer or an independent contractor.
- A self-employed person, who runs their business online.
No matter what kind of worker you’re, you need to report your income and file taxes just like a traditional worker.
Which Taxes Do Remote Workers Need to File? Everything Here in Tax Filing Guide for Remote Workers In US
If you work remotely in the U.S., here are the major types of taxes you might have to file:
1. Federal Income Tax
If you live in the U.S. and earn enough money, you must send a tax form to the IRS. It is compulsory and this form is usually due by April 15, unless the deadline is changed or extended further.
2. State Income Tax
You might have to pay taxes in more than one state based on where you live and where your company is located. This is called the “telecommuter tax rule”, and these rules can be different in each state.
3. Self-Employment Tax
Freelancers, contractors, or business owners have to pay a special tax called “self-employment tax” which is 15.3%. This tax money goes toward Social Security and Medicare. They also have to pay regular federal and state income taxes on top of that.
State Taxes: Where Do You Owe?
If you’re working remotely, then one of the most common and confusing parts of tax filing is dealing with the state taxes. Here’s how to approach smartly:
1. Resident State vs Work State
If you live in one state but work remotely for a company in another state, you might have to pay taxes in both states, which can be too much for you. But many states have deals that help you avoid paying tax twice on the same income.
2. Non-Resident State Returns
If your company is in another state, you might have to file a tax form for that state as a non-resident. This depends on how long you have worked from that state.
3. No Income Tax States
There are some states in the U.S., who don’t charge state income tax and these states are Florida, Texas, Nevada, Alaska, South Dakota, Washington, and Wyoming.
So, if you live and work in one of these states, you only have to file for federal taxes, not state taxes.
Home Office Deduction for Remote Workers
If you’re self–employed, like a freelancer or a contractor, you might be able to claim a home office deduction. This means, if you use part of your home for work, you can subtract some costs from your income when filing taxes.
Requirement:
- Your home office must be the main place where you do your work in order to qualify for the home office tax deduction.
- You must use that office part regularly and often for work, not for anything else to qualify for tax deduction.
Things You Can Deduct:
- You can deduct a part of your rent or mortgage, which is the home loan cost based on how much of your home is used for work.
- Utility bills like internet, water, phone and electricity.
- Office supplies and furniture you buy for your work when you file your taxes.
- The cost of repairs and maintenance related to your home office.
If you work as an employee (W-2) for a company, you usually can’t claim a home office deduction. But if you work as a contractor or are self-employed, you can claim it.
Business Expenses You Can Write Off
If you’re working remotely, you can reduce the amount of tax you have to pay by showing the costs you spend on your work. But to do this, you must keep proof like and receipts of all these expenses:
- Laptop, monitors, or other equipment
- Business-related travel expenses
- Subscription services like adobe, zoom, canva etc.,
- Marketing and advertising costs
- Legal and professional fees.
You can use a form called IRS Schedule C to tell the government how much money you earned from your business and how much you spent on business costs.
Tracking Income and Keeping Records
If you keep your papers and receipts in order, it will be easier to do your taxes. Here are the things you should keep record of:
- 1099 forms for freelancers
- W-2 forms for employees
- Invoices and payment receipts
- Bank statements
- Expense receipts
You can use special computer programs like QuickBooks or FreshBooks, or even a simple spreadsheet, to help you keep track of the money you earn and the money you spend.
Quarterly Estimated Taxes
When you work remotely, you need to pay taxes four times a year. This helps you pay your income tax and the tax for being self-employed on time.
Typical Due Dates:
- April 15
- June 15
- September 15
- January 15 of the next year.
Use a form called IRS Form 1040-ES to figure out how much tax you need to pay every few months. If you don’t pay enough, you might have to pay extra fees as a penalty.
Tax Tools for Remote Workers
There are several user-friendly tax software platforms that can help you with the tax filing:
- TurboTax: Great for beginners and freelancers
- H&R Block: It offers professional support and manual filing.
- TaxSlayer: It is affordable and easy to use.
- FreeTaxUSA: Free for basic returns and low cost for extra features.
Hiring a tax professional can also be a smart move to file tax returns, especially if you work across different states and countries.
Remote Work Across Borders: International Tax Rules
If you’re a U.S. citizen working from another country, you still have to send your tax forms to the U.S. government. You might also qualify for some tax benefits like:
- Foreign Earned Income Exclusion (FEIE)
- Foreign Tax Credit (FTC)
These tax benefits can really help you avoid double taxation. But you need to meet some rules, like living in another country for a certain amount of time.
To claim these benefits:
- You can use IRS Form 2555 for FEIE
- You can also use IRS Form 1116 for FTC
Common Mistakes Remote Workers Should Avoid
- Forgetting to file in multiple states when required
- Not paying estimated tax on time
- Assuming you can claim home office deductions when you’re not eligible
- Ignoring foreign income reporting requirements
- Not keeping detailed financial records
Avoiding these mistakes can save your time, money, and stress.
Conclusion
Hence, filing taxes as a remote worker in the USA is not a difficult task. By tracking all income and expenses, filing the right forms to the IRS website, by paying self-employment and estimated taxes, by taking advantage of deduction, and by staying organised, you can easily achieve your Financial goals.
Know someone who needs filing tax guidance as a remote worker? Share it with them! And drop your thoughts in the comment section. We’d love to hear from you and keep the conversation going!
FAQs
Do I have to file taxes in my employer’s state if I never go there?
Not always. It depends on the state’s tax laws. Some states tax based on employer location, others based on your residence.
Can I deduct my internet bill if I work from home?
If you’re self-employed and use it for work, yes but if you’re an employee, then probably not.
What if I move to a different state mid-year?
You may need to file tax returns for both states, but only for the part of the year you lived in each one.
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