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Anonymous
09/06/20 at 8:48PM UTC
in
Career

Freelance work

Hi everyone. Looking for some advice… I’m exploring the idea of doing freelance work (and have a couple of potential freelance opportunities). I know this sounds silly but I’m just not sure: - How I will be paid? - If I need to set myself up as an official “freelancer”? - How to make sure I’m doing my taxes properly? I’m so new to this and wondered if anyone has been through this before and has any advice or a place I can start figuring this stuff out? Any advice would be much appreciated :)

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Tracy Kerney
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20
Content Creator, writer
09/15/20 at 6:10PM UTC
I have been a freelancer for 22 years. It has its pros and cons, especially in this COVID climate. Every company pays differently, i.e., monthly, weekly or on certain dates of the month. You will be considered a 1099 worker, so no taxes will be taken out of your check by the company you work for. A general rule of mine is to put away $250 for every 1,000 I make. And make sure you are keeping track of expenses and write-offs during the year. All and all, it can wax and wane, but it has provided the flexibility I so needed as a working mom.
Katherine
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21
Online Business Manager
09/11/20 at 12:46AM UTC
- How I will be paid? Quickbooks & Dubsado are popular online solutions for sending invoices. I highly recommend that when you are calculating your rates that you make sure to take into consideration your skill level in conjunction with the quality of life that you enjoy which will inform you as to whether you need to uplevel your skillset or get trained in another set of skills altogether. Are we working to live or living to work? I also recommend consider setting up retainer fees as opposed to hourly. This way, we get paid ex. monthly, before work begins, rather than after. There are people who will try not to pay you. On a retainer though, you are setting aside time and resources to be available and can always charge additional services on the next invoice. - If I need to set myself up as an official “freelancer”? Make sure that you do thorough research on contracts and make sure you have a signature before any work begins. It's important to include things that protect both parties regarding confidentiality, intellectual property, what happens when an invoice is unpaid, how much notice must be given to terminate a contract, and so on. - How to make sure I’m doing my taxes properly? As above, consult a professional. General rule: put aside 25-30% of all 'freelance' income into a separate account just for taxes EOY. Grab a spreadsheet and create areas for income and expenses. Track everything that's coming in and going out of the business.
Anonymous
09/10/20 at 9:12PM UTC
Wonderful advice! Thank you for your time on this!
Robin Hardman
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55
Employee comms and "great workplace" expert
09/10/20 at 8:25PM UTC
Lot's of excellent advice above. I've been self-employed for 20 years, and much of the way I do things has evolved. You'll learn a lot by experience and undoubtedly tweak things along the way. (It's not clear to me if you are talking about freelancing on the side or full-time). A few things I have found helpful: 1st, about the whole billing/payment thing--do set a rate, either by hour or by day, and don't take less than you believe your work is worth, but also be willing to be flexible. Sometimes potential clients have a limited budget--I always try to work with them to see what I can do within their budget. I also have a lower rate for small businesses and (small) non-profits. 2nd, I don't know what your finance/tax skills are, but I have found it worth every penny to have a good accountant. Self-employment--especially if you decide to become incorporated--means endless required tax filings and letters coming in from local and national tax authorities. My accountant tells me what is due, when,; puts together my annual taxes with all necessary attachments; and--best of all--when I get some (to me) completely unintelligible notice from the IRS, I can just scan and email it to her and she tells me what, if anything, I need to do. I firmly believe she has saved me in taxes and penalties far more than she has cost me in fees. Finally, like one of the respondents above, I also keep a paper ledger to track my billing day to day. A trick I learned early on is to write down date and amount of invoice, then write down date when I receive payment. This way, with repeating clients, I know if I'm likely to get payment in 2 weeks or 2 months (!) and know when I should be following up if payment hasn't arrived. Good luck!
Emily Kessler
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199
Org. problem solver using design thinking
09/09/20 at 9:09PM UTC
Adding to all the great advice above...I'd recommend using time tracking software that can also generate invoices. I've used https://www.getharvest.com/ in the past. They have a free version with limitations.
Laura Silverman
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76
Connecting people to the world's greatest brands
09/08/20 at 10:36PM UTC
This is a really great, thorough (and lengthy) article about pricing freelance projects. It's written towards design, but I think relatable to any industry or project. https://vanschneider.com/the-art-of-pricing-freelance-projects
Allix Stewart
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193
Human Rights Graduate Student & Resume Developer
09/08/20 at 9:54PM UTC
Everyone here has given a lot of great advice - I have been freelancing for the past three or four years on the side and it definitely takes some organization! My understanding is that depending on how much you make, you may be required to pay taxes quarterly rather than annually. DEFINITELY be prepared where your taxes are concerned because that blindsided me the first year and I'm lucky that I had enough saved to pay what I owed! You will have to set aside those taxes yourself so be prepared, and I'd recommend getting a separate bank account for your estimated taxes like Alexis said. I myself do not have an accountant, but will be getting one soon and definitely recommend it - things would have been much less of a headache for me if I hired one earlier on! Save yourself the stress of tax season :) Lastly - don't forget to enjoy the freedom that it gives you! I just made a big life change and now my freelancing is supplementing my income while I earn my masters degree full time. The flexibility is amazing and fits in so well with my schedule, and the older I get the more I value having that control over my time. It's part of what makes freelancing so enticing!
Anonymous
09/15/20 at 12:23AM UTC (Edited)
Technically, you are not required to make quarterly payments, but (and please double check this with an accountant!) you *are* required to pay as much as your prior year liability by Q4 deadline (January 15 of next year) *if you will owe same or as much as prior year.* If additional amounts owed, you will need to pay this by April 15 of next year. Quarterly payments are helpful so that you make sure you reserve enough money to pay,
Allix Stewart
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193
Human Rights Graduate Student & Resume Developer
09/15/20 at 11:12PM UTC
Thank you for mentioning this!!
Simone Ishikawa
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15
Start up advisor - ex banker, fintech operator
09/08/20 at 8:28PM UTC
In the UK, employers can claim back for salary up to a certain point for R&D or other type deductions. Freelancers are also eligible for lower tax if they set up a company to get paid. For you to get paid, get ready to hustle, mark up in right situations and be rejected most of the time. Also even if you do get in agreement, actually getting the cash in the bank is when it's done. These things you take for granted when you work for a company, now you need to fight for and make sure you introduce chasers for late payers.
Jacqueline Cutler
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276
Journalist
09/08/20 at 4:34PM UTC
Set up an LLC. It's not too expensive, at least in New Jersey, and requires an annual fee to retain the LLC. How you get paid is by billing clients. I tend to invoice at the end of each month. My method is rather hopelessly low-tech, but I then record the amounts I billed different clients in a notebook. When payment is received, I check them off. By the next month, when invoicing again, if I have not been paid, I send a polite follow-up and ask about the money. As far as taxes, I pay quarterly and had an accountant set it up. Eventually, we will see people in person again, so I would have cards made up, and a website ready so potential clients can see what you have to offer. Be careful about keeping records and even if you do it once a month, you should be able to maintain all. Best of luck!
.
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85
09/07/20 at 2:38PM UTC
If you have a regular job and do freelancing on the side, you can have your regular employer withhold extra money from your paychecks so you won't owe a bunch of money at tax time. This is the system I use to cope with the fact that my freelance clients are not withholding any taxes from the money they're paying me.
Anonymous
09/08/20 at 3:05PM UTC
Good to know! Thank you :)

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