STL Tax LLC

Freelancers… don’t let tax time get you by surprise…

Freelancers don’t have taxes automatically withheld, so setting aside a portion of each payment ensures they can cover income and self-employment taxes when they’re due. Without planning ahead, it’s easy to face a large, unexpected tax bill and potential penalties.

Confused about how tax brackets work in the U.S.? Many people think moving into a higher tax bracket means all their income is taxed more. That’s not how it works.

The U.S. uses a progressive tax system, which means your income is taxed in layers (or “brackets”). Each portion of your income is taxed at a different rate, not your entire income at one single rate.

Here’s a simple breakdown:

- Income is divided into ranges (tax brackets)

- Each bracket has its own tax rate (10%, 12%, 22%, etc.)

- You only pay the higher rate on the income that falls within that specific bracket

For example: If part of your income falls into the 22% bracket, only that portion is taxed at 22%—the rest is taxed at lower rates.

👉 This means earning more money won’t suddenly reduce your take-home pay due to higher taxes.