Taxes

Filing income tax as a freelancer: step by step

Written by Ilias6 min read

Filing income tax as a freelancer: step by step

Every spring it is that time again: the income tax return. For employees it is largely a matter of checking what has been pre-filled, but as a freelancer you complete the business part yourself: your turnover, costs, balance sheet and deductions. That is very doable if your records are in order and you know the sequence to follow. This article walks through the return from start to finish.

Step 1: preparation

First close your records for the year. All invoices booked, all costs processed, your bank entries reconciled and your VAT returns complete, including any supplementary return. Your bookkeeping then produces a profit and loss statement and a balance sheet as at 31 December. Also have ready your time records (for the hours criterion), your mileage log, and the annual statements for any wages, benefits and your mortgage. You file before 1 May, or later if you request a postponement or work through an adviser with a deferral arrangement.

Step 2: are you an entrepreneur for income tax?

The return first asks whether you have business profit. If you are an entrepreneur for income tax purposes, you complete the business section and have access to the entrepreneur deductions. If you are not, for example with small-scale side earnings, you declare that income as results from other activities: costs deductible, but no self-employed deduction or SME profit exemption.

Step 3: profit, balance sheet and private withdrawals

In the profit section you transfer your turnover and costs from your bookkeeping, excluding VAT. You also complete the balance sheet: your assets such as business equipment, receivables and your business bank balance, and your liabilities such as payables and VAT still due. You also declare what you withdrew and contributed privately. Mixed costs are corrected here: the private share of your phone costs, the non-deductible 20% of business meals, and the addition for private use of a company car.

Step 4: the entrepreneur deductions and exemption

If you meet the 1,225-hour criterion, tick the self-employed deduction (1,200 euros in 2026) and, if you qualify, the starter's deduction of 2,123 euros. The return then applies the 12.70% SME profit exemption automatically. Do not forget the small-scale investment deduction either if you invested more than 2,900 euros during the year: you enter it under the investment schemes.

Step 5: the rest of the return

After the business section comes the regular return: any employment income, your home with mortgage interest relief, personal deductions such as gifts or healthcare costs, and your assets in box 3. If you have a tax partner, certain items can be divided between you; the allocation of the home, for example, often leaves room for optimisation. Disability insurance premiums paid and annuity contributions for your pension are deductible in the designated sections.

Step 6: check, file and pay

Before submitting, check the reconciliation: does the profit in the return match your annual figures, does the balance sheet balance, and is the result explainable compared to last year? After filing you first receive a provisional and later the final assessment. If you have to pay extra, account for tax interest if the assessment is issued after 1 July. If you expect similar profit next year, request a provisional assessment right away so you pay in instalments. And keep the return with all underlying documents: the seven-year retention obligation applies here too.

This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.