Posts filed under 'Ask the Cubicle Expat'
Thanks to everyone who wrote in with their burning freelance questions last month. I really appreciate it. This question really stuck in my craw, so I decided to give a quick answer now.
Frustrated Freelancer asks: I recently was negotiating a project with a client I really wanted to work for. After I told them my price, they came back with, “We think this could turn into a lot of ongoing work, so would you be willing to come down?” It made no sense. If they are going to come to me with more work (and therefore take up a higher percentage of my time, which is then unavailable for other projects), why would I lower my price? Maybe there is some logic to lowering your price for some situations? I’d love to know.
I answer: Your instincts are right. “We will give you more work later” does not justify a haggle-down now. It’s a pretty weak argument for the client to make. Not only are you forfeiting 5, 10, or 20 percent of your earning potential now, you’re doing it month and after month if you continue to work with this client. And since you’d ideally want to raise your rates in another year or two to keep up with the cost of living (a topic for another day), you’re starting out wayyyy behind where you need to be.
The client’s tentative language (”Would you be willing…?”) indicates they’re just bluffing and trying to save a few bucks. Something more hard-and-fast like, “We’d love to work with you, but $xx.xx is the highest our budget will allow” lets you know there’s no more wiggle room (say, because you’re negotiating with a non-profit organization or a small company with limited funds for outsourcing projects). So my answer would be, “No, but I could do [a price midway between what you initially suggested and what they’re now offering].” If you’ve padded your first offer by 10 to 20 percent of what you actually want for the job and a haggle-down ensues, you have a much better chance of coming away with a price you like.
Before you enter into any negotiations with a client, I’d get clear on what “I really want to work with them” means. Would one sample in your portfolio from this company meet your needs? If all you’re looking for is to be able to say, “I’ve worked with Fancypants Client X,” then the answer is yes.
If, however, you believe strongly in the organization’s mission and want to do whatever it takes to forge an ongoing relationship with them, maybe you resign yourself to working for them at a discounted rate (if that’s the best you can do) in the name of community service and make up the difference with higher-paying bread-and-butter clients. Or, if the client’s offering some high-profile work that would get you noticed by other potential clients, industry bigwigs, and perhaps even the media, maybe you do a few pieces for them and reap the rewards in other ways (perhaps press for your business, which leads to more business) before moving on.
But back to the haggle-down at hand: Say the client’s shot down your counteroffer or shut you down with a “We simply can’t afford it” statement. You want to work with this client at least once, but you don’t want to get branded as someone who makes 80 percent of what she knows she’s worth. So you tell them you’d really like to work with them on their campaign to save the polar bears and will give them a 20 percent discount on this one gig so they can afford it. If it’s a for-profit company, you can add that you hope they can come up in price in next time.
Then on your project agreement and invoice, be sure to indicate that you’re giving a 20 percent discount. That way, the client won’t expect the same low price in the future. And neither will any of the colleagues they recommend you to.
April 3rd, 2008
Jasmine asks: I just started out as a full-time freelance writer/producer/creative consultant in NYC about a month ago. I am a little unsure whether it is my responsibility to offer a W-9 form to clients, or if it is up to them to ask me for one. (Obviously, I’d rather not hand out my social security number willingly.) I have good record-keeping practices to ensure I am able to determine the appropriate amount of taxes I will owe, but expect that without a W-9 I won’t receive a 1099, although I will certainly report the income on my own returns. Any insights as to who needs to initiate a W-9 are very welcome.
I answer: Congrats on going freelance! This question, cousin to “Help, my client didn’t send me a 1099!”, is one I hear a lot from new freelancers. For those who don’t know, a W-9 is a simple form that tells clients your tax ID number (your social security number if you’re not incorporated), which they need for their records and to generate those cute little 1099 forms they send you each January.
It’s in the client’s best interest to get this form to you, and 99 percent of them will. You’re right that you won’t get a 1099 if the client hasn’t asked you to fill out a W-9, either because they’ve never done this before and have no idea that they’re supposed to (in which case, your good records will come in handy at tax time) or because they’re just starting to use freelancers and are too lazy/busy/confused to follow proper tax practices.
Don’t worry so much about giving your social security number to a reputable business that other freelancers can vouch for. I understand the fear, but I’ve never heard of anyone getting their social security info misused by a standup client, and I’ve been doing this since the Pliocene Era. If, however, a new client is giving you the heebie-jeebies, that’s a clear indicator that you shouldn’t work with them. And if anyone has a juicy My Client Committed Identity Theft And/Or Sold My Social Security Number On The Black Market story, I’m all ears (and of course, sorry to hear it).
March 17th, 2008
I subscribe to a lot of self-employment and freelance writing discussion lists. Not surprisingly, this month everyone’s been buzzing about how to file their freelance taxes. Here are a few recurring questions I’ve seen.
(Note: These answers are geared toward sole proprietors like me, not LLCs or corporations, which are subject to different tax laws, about which I know diddly. Double note: I’m a freelance writer, not a financial professional. If you want solid tax advice you can bank on, you’d best check with your friendly neighborhood accountant. Okay, now that we’ve got the requisite ass-covering out of the way, let’s talk taxes…)
Q. Help! I earned more than $600 in 2007 from a client, but they didn’t send me a 1099 form. Do I still have to pay taxes on that money? Do I need that form?
A. You do still have to pay taxes on that money. But no, you don’t need the form to do so. Also, in case you were wondering, if your client tries to claim the money they paid you as a business expense, they could get into trouble with the IRS for not sending you a 1099 form. But that’s their problem, not yours.
Q. Help! I billed Client XYZ for $3,000 in December of 2007 but wasn’t paid for it until January of 2008. Do I have to pay taxes on this money with my 2007 fed tax return or should I pay those taxes with my 2008 estimated tax payments?
A. Since the client paid you this amount in 2008, you will owe taxes on it for 2008, not 2007. You go by the year paid, not invoiced. If the client tries to put this amount on your 2007 1099 form, you need to talk to their accounting department about correcting this mistake. Otherwise, you’ll be paying taxes on money you technically didn’t earn in 2007.
Q. Help! I just measured my home office and it’s 20 percent bigger than I’ve been reporting to the IRS for the past three years. Can I tell them my office is actually bigger? Will this trigger an audit?
A. Congrats! You get a bigger write-off. It’s perfectly reasonable that your home office size would increase as your freelance business blossoms, so just tell the IRS that your office space has grown. (Actually tell your accountant, and s/he will know how to indicate this on your fed tax return.)
This minor change in office size alone should not trigger an audit, unless of course you’re unfortunate enough to be randomly selected for an audit (like jury duty, only more painful). As I understand it, if the IRS intentionally audits you, it’s because you have some serious red flags on your tax return — for example, an inordinate amount of expenses claimed. Your accountant is there to ensure this doesn’t happen. Yet another reason you should not solely rely on random internet advice when doing your taxes.
Final notes: There is a limit to what percent of your home you can write off as office space. Because I’m too lazy to Google it, you’ll have to ask your accountant about this. Also, the IRS wants your home office space to be solely dedicated to your business, so be careful that you don’t blur lines here.
You can find more of my freelance tax FAQs here and here. And you can find an accountant by asking your freelance friends who they use.
February 27th, 2008
Student X writes: I was in your class last summer on “Everything you Wanted to Know About Getting Published.” I am in the process of starting a proposal for a non-fiction work, but I want to start a little buzz about it and start a blog. How do you suggest blogging regarding this so that the publisher has something to look at? I’m not sure how to start. I’m not much of a blogger anyway, but I write reviews of books on goodreads.com all the time.
I answer: Congrats on working on that book proposal. Cool! Here are my recommendations for starting a blog. I’m sure others will chime in with their suggestions too.
- Sign up for a free blog account with Blogger, TypePad, or WordPress.
- Pick a template for your blog. These are also free.
- If I’ve already lost you, read a book on blogging. Or take a class. Or have a blog-savvy friend walk you through the setup.
- Pick a topic for your blog, a niche you’ll stick with. Don’t be a generalist. Since you’re trying to build what’s known as a “platform” for your nonfiction book, your blog topic should be the same as that of your book: wrench-wielding women, mimes who love too much, recovering Republicans, etc.
- Pick a relevant, catchy name for your blog.
- If you need inspiration, check out some other blogs by authors to see how their blog complements their book topic, or at least showcases their crafty writing. Some blogs by authors I know: Offbeat Bride, Single State of the Union, Bad Advice, Totally Wired, Watercooler Wisdom, The Renegade Writer, Lusty Lady, Felicia Sullivan, Marci Alboher, Boss Lady.
- Also check out blogs by people who went from blogging to book deal: Escape from Cubicle Nation, Breakup Babe, Happily Even After, Lifehacker, and Web Worker Daily are a few examples. Here are some more — these “blookers” were even nominated for an award.
- Read Galley Cat to learn more about who’s getting book deals from blogs these days. Sign up for Publishers Lunch. Skim Publishers Weekly. And google “blog to book.”
- Make sure your About Me page gives your real name, your email address, and your writing/subject matter credentials. Be sure to include a photo of yourself, and make sure you brush your hair and teeth.
- Start blogging! Preferably posts that are 300 to 600 words (give or take) in length.
- Use photos whenever you can. And links. Especially to other blogs.
- Proofread your posts and check your links.
- Send out a blanket email to everyone you’ve ever met in your life telling them about your blog. Do this after you’ve made a few posts you’re proud of. Only do this once.
- Add your blog URL to the signature of your email address.
- Join some writing listservs or online communities and contribute to the conversation, keeping that signature in all your posts. Ditto for online communities revolving around the topic of your book.
- Post to your blog at least three times a week. Stay on topic, and don’t be afraid to be opinionated, funny, and/or controversial.
- Never apologize for not posting for the past two weeks. No one cares. If you have a lot of readers, a better idea is to do a post like this in advance.
- If you feel compelled to blog about your cat, try to find the tie-in to your overall blog’s topic. Otherwise, maybe skip the cute pet posts.
- Read and comment on other people’s blogs. It’s the best way to get new readers to come to your blog — and to raise your Google rank.
- Read articles on how to blog. Here’s one that people seem to like, though I tend to shy away from all those Best/Richest/Smartest Blogger Ever types. Here’s an even better tip list by my friend Amanda; it includes some suggestions for books on blogging too.
- Get a free tool to measure your site traffic so you can see what posts people like the best and how many readers you have. Here are a few: Site Meter, Google Analytics, MyBlogLog. This is not my forte, so I’m sure others will chime in.
- Speaking of, know that blogging means putting yourself out there. Sometimes rude, nasty people with nothing better to do make obnoxious comments on your site, often anonymously. That’s the way of the web unfortunately. You have the option to hit Delete. More often than not, though, the comments will be supportive, encouraging, helpful. You may even make a new friend or two. Maybe even a book agent friend. And wouldn’t that be nice?
- Above all, have fun. If blogging sounds like a chore, maybe you’re better off publishing a couple of well-placed articles on your pet topic instead (think Huffington Post, Salon, Slate).
February 19th, 2008
Sometimes people who read this blog or were kind enough to purchase my book email me to say nice things. That makes my day. Last month one such note arrived from a budding writer named Jackie Leventhal, who recently formed a kickass-sounding writing group in her hometown. Jackie asked a bunch of questions on behalf of her group, which I had a blast answering. In case any of it’s helpful to you, I thought I’d put the edited-down version of our exchange here.
Jackie writes: I just read your book and completely loved it. Thank you for writing such a robust and spot-on book about my ultimate goal, that being escaping the cubed lifestyle. I’m writing to you not only as a fan of your work, but as a 24-year-old aspiring writer who recently launched Mimosa Musings, a monthly writing group for women in DC who love to write and relish the support of female friendships. Meetings are on Sundays, and mimosas are served to usher in the warm feeling of a weekend brunch. As I try to continually better the substance of the group — meeting topics, writing exercises, partner activities — I’m reaching out to writers I admire for advice.
Q. What was your “Aha!” moment that made you feel like you were meant to be a writer?
A. In the third grade, Ms. Fitzsimons (she had excellent red hair and wore kelly green suits!) told me I was a “real writer” after reading one of my book reports. I loved that she used “Ms.” back in the 70s and I totally hung on to what she’d said.
Q. How do you discipline yourself as a writer?
A. By taking deadline projects. Otherwise, I’m the laziest slug around. I have a book now due in about 50 days. If I don’t finish it, I don’t get the second half of my advance and jeopardize getting to keep the first half. For non-deadline projects (say, an essay I’m writing that I hope to place somewhere big, like Salon), I try to tackle it in bite-size pieces throughout the week (that is, when I’m not staring down a big hairy book deadline).
I write best in the morning, so I’ll try to do an hour or two before my other work two to three times a week. I also have a soundtrack: Derek and the Dominos. I love that CD and wore it out on a writing retreat in 2006. Now when I pop it in, I’m like one of Pavlov’s dogs. “Oh, Eric Clapton’s wailing about being in love with George Harrison’s wife again? Must be time to write…”
Q. What are your ideal writing conditions? Setting, beverage, time of day, journal v. laptop, pen (feather?) v. pencil (mechanical?)…
A. Good night’s sleep (I’m useless when tired, cranky), morning, desk, computer. Sometimes I walk first. Or rock out to music. I have an office in my house (spare bedroom), but I can write anywhere if need be. You need to be able to write anywhere, in blood if you must. When I’m blocked on something, I leave the office, grab a pen and paper, sit on my couch or in my backyard if it’s summer, and scribble until something comes. Or I’ll shower. Or walk. All of which help.
Q. What advice can you offer to aspiring writers about the journey to the bookshelf?
A. As my friend Angela Fountas says, “Sit down and write.” It’s that simple. You just have to start. And you have to do it often. Any writing teacher/book tells you so. Make it a habit, just like yoga or running, so that if you miss a day, you feel antsy and can’t wait to get back in the chair.
You gals already have the community thing down, meeting with like-minded creative types, which is so important. Writing is such a solitary business that you NEED to have creative friends to bounce ideas/fears/successes/editor woes/finished stories off of.
Q. Finally, please suggest a writing exercise that myself and fellow Musers can do at a monthly meeting.
A. Think of a scene, a story you’ve been wanting to tell, whether it’s how you’re pissed at your landlord for not fixing your toilet or how you met some sweet young thing at the Barack Obama rally last month. Set the timer for 15 minutes. Now write it from the perspective of your archest enemy. Or the writer currently seated to your left. Or your grandmother. Or Hillary Clinton. Or John McCain. Or your favorite third grade teacher. Your favorite writer. Your dog.
(Also, Natalie Goldberg’s books Wild Mind and Writing Down the Bones are loaded with inspiration and writing exercises.)
February 13th, 2008
MB asks: I was wondering if you’ve had much luck with Guru.com. I’m trying to save money, so I don’t want to join unless I think I will make money from it. What do you think?
I answer: MB, here are three things you probably did not know about Guru.com:
- Back in the late nineties dotcom startup heyday (the first time around), Guru.com was cool. I’m not saying Guru isn’t cool now, but back then it had personality, spunk, sass. It had articles, freelancer haiku*, and a bit more of a community feel. It had Free Agent Nation author Dan Pink as a columnist.
- I wrote several articles for Guru.com in its first year or two, and was paid handsomely, before the dotcom bubble burst and the site went on hiatus, then was sold, then re-emerged as the Guru.com you know now.
- While I loved writing those articles, I also had the worst editorial experience of my life on one such piece, where my editor introduced not only a rash of typos and inaccuracies into my story, but an embarrassing bit of outright plagiarism. It landed me some angry mail from readers. (Lessons learned: (a) Always ask to see the final article before it runs, especially when you’re not familiar with an editor or publication. (b) You can recover from even the most shameful of freelance experience.)
Of course that doesn’t really answer your question. Truth is, I have never used Guru.com in its new incarnation, a freelance job bidding site. In fact, I have never used a job bidding site. Here’s why. Short answer is, I’d try getting work on your own first through your personal and professional face-to-face and online networks. Or go through a creative agency that doesn’t charge you a subscription (or make you bid) to get the work.
I just spent a few minutes on today’s Guru.com. Interesting business model. I’d be curious to hear if anyone reading this has had any luck with it (particularly the Basic membership, which appears to have no monthly subscription rate but allows them to skim 10 percent off your project payments). If you do go this route, be sure to pad your fees by 10 percent so you make up the difference.
Also interesting are the invoicing and arbitration services (which I presume cost extra; seasoned Guru.com users, feel free to correct me if I’m wrong). Cool that they offer these services, especially arbitration, which goes after clients who refuse to pay up and gets you your money. But ick to having to route your pay through this site. I’d rather deal directly with a brick-and-mortar creative agency I can call up. Sometimes it’s not the easiest getting customer support from a “faceless” online service provider (paging Amazon).
In sum, I supposed if you’re starved for work, others say they’ve had good experiences with the site, and you can get a good rate for your projects, Guru.com could be worth a trial run. But I’d put it in the “last ditch effort before I ask for my day job back” category.
*If I find the freelancer haiku of mine Guru.com ran (with commuting monkey illustration!), I’ll scan it and post it here.
February 10th, 2008
Yesterday, I was on a panel of working writers/editors/authors/screenwriters, talking to students in the undergrad English department at the University of Washington for the school’s Career Discovery Week. One student asked whether we’d recommend getting a grad degree to those hoping to work full time as a journalist, novelist, or any other type of writer (or editor). I’m happy to report that the answer across the panel of five gainfully employed full-time or freelance wordsmiths was a resounding “Hell, no!”
Here’s why:
1. It’s not a job requirement. Take it from someone who’s applied for a heck of a lot of journalism and publishing gigs. It’s never on the list of job requirements. Also, I have hired many a subcontractor to write and edit for my clients. Experience in the task at hand (technical editing, marketing writing, whatever) is always my number one requirement; I don’t care whether they have letters after their name. And neither do my clients.
2. Everything relevant I learned in my undergrad journalism program you could learn in one class. Yep, I took countless classes on how to write a story about a city council meeting and avoid landing my employer a libel suit. But all those lectures and homework assignments were nothing compared to the (far more educational) real-world experience I got at my internships and first couple of newspaper jobs. In other words, take your undergrad classes, then get your on-the-job experience as an intern, volunteer, and rookie writer or editor. It’s the best training around. And in case you were wondering, all the college credits in the world won’t teach you how to write a book. The first time you do it, you still have to flounder around and figure it out like everyone else.
3. All the great contacts I’ve made over the years I made on the job. I hate the argument that you need to go to grad school to get to know the key players in the publishing industry. No you don’t. Save your money and get paid to learn as an entry-level writer or editor. Much cheaper, and gets you two years ahead of your grad school counterparts in the job market. If you want to network, join a professional association like the Society of Professional Journalists or the Northwest Independent Editors Guild. Go to writers conferences, events like Blogher’s annual conference, and the readings/lecture series at your local community arts center (like Richard Hugo House in Seattle). Get out in the real world and meet other working writers, editors, bloggers, and publishing pros in any of the many professional settings they congregate — which, by the way, unless they’re a professor, isn’t at your local university.
4. It’s a dang expensive way to avoid working. As one twentysomething on yesterday’s panel said, don’t be afraid to leave college and enter the workforce. She fearlessly dove into the world of work two years ago, and now she’s the managing editor at a diversity consulting firm. And as the guidance counselor running the panel said, if you don’t know what to do next, get out there and get some work experience. Don’t risk burning out on too many consecutive years of schooling. Instead, sample the various types of writing and editing jobs and industries to see what you do and don’t like. To that I’ll add: You ain’t gonna “find yourself” in law school. Better to flit around Asia, help rebuild New Orleans, or take up any other adventure that gives you the time and space to figure out what’s really important to you.
There is of course one reason to get a graduate degree in a field that doesn’t require it:
You love the topic, can’t wait to learn more about it, and want to do so in a group setting. In How to Become a Famous Writer Before You’re Dead, Ariel Gore advises getting an advanced degree not in writing, but in a topic that really turns you on, be it medieval lit, comparative religion, or the history of clogging in America. That way, you’ll always have something to write about. I couldn’t agree more.
My boyfriend got a grad degree in medieval literature a decade ago. He didn’t want to go into academia, which is what you have to if you want to work in medieval lit, so now he works in the software industry. As far as I know, he’s still paying off his student loans. But I asked him last night if he’d do the degree all over again, even though I knew what he was going to say. (”Absolutely!”)
That’s when you know you’re making the right decision to go to grad school — when it’s something you want to do as much as that summer roadtrip you’re planning, that craft business you’ve been nursing on the side, or that volunteer gig you do at your local pet shelter.
February 2nd, 2008
Tiffany asks: A freelancer more experienced than me — she writes for national glossies like Gourmet, Smithsonian, etc. — told me that I needed to be careful about how much commercial work I take — especially copywriting — because editors at national magazines won’t see me as a “real” journalist/writer if I do a lot of corporate work. Basically, she scared the bejesus out of me, since right now as I’ve started off, all I’ve been doing is corporate work since it has paid well and allowed me to transition out of 9-to-5 work. Do you think her warning is something to heed? I know I want to eventually do some feature writing, and hopefully for national pubs eventually, so I’d like to not make a big mistake at the beginning of my career that can derail my plans.
I answer: This is a great question. My initial thought? Poppycock! You need to do whatever you need to do to pay the bills now. And as long as you’re not writing copy for serial killers, I wouldn’t worry too much about what some future magazine editor thinks of what you worked on two or three years ago. Think of all the people with staff jobs who move in and out of PR/corporate/copywriting/journalism work. Happens all the time.
But just to make sure I’m not on crack, I checked in today with an extremely successful freelance journalist I know and asked about her career trajectory. About a decade ago, she had a full-time marketing job. About three years ago, she had a part-time marketing job to pay the bills while she freelanced on the side. Now she’s a full-time freelancer with a column in a major metropolitan newspaper that’s sometimes syndicated throughout the country, three book deals, monthly clips in a couple of the leading online news media outlets, and clips in a dozen huge-circulation national newsstand pubs.
You can reinvent yourself as a writer at any time you decide to, so forget those killjoys who tell you what you do today will seal your career fate for the next decade or three. There is this bit of snobbery in certain writing sects, probably because the competition is fierce and, quite frankly, all print and traditional media are being pushed out by new media, blogs, even citizen reporting. Which means old-schoolers can be a bit territorial. (A newspaper editor I met at a party recently tried to tell me that freelancers aren’t real journalists. Considering how much newspapers have been downsizing lately I thought she might want to consider a bit more humility.)
To your friend’s credit, she may have been trying to warn you against writing some highly visible PR/marketing copy for businesses/megacorps that would cause a conflict of interest with the pubs you want to write for in the immediate future. Say, if you’re trying to get into Saveur but you’re writing press releases for Sur La Table.
At some point, you will have to make time for the journalism work if you want to break in, and to be taken seriously you will have to make room in your schedule to pitch and accept assignments. And you will have to be careful that you don’t work for any corporate client that might be considered a conflict of interest with the topics/pubs you write for/about. Otherwise, you may scare some editors off.
So start thinking about what pubs you want to write for (what topics? which readers? which niches?). Once ready to approach them, make sure you’re not or haven’t recently written about one of their advertisers or anything else that could be considered a conflict of interest. When you get serious about approaching publications, you’ll probably only tell them about your publishing credits anyway — not that you write the newsletter for your local supermarket chain. You want to keep your “consulting work” on the down low because (a) it’s not relevant, and (b) it might make you seem like a hack — unless the fact that you’ve written software manuals for five years makes you highly qualified to write reviews of new digital products for Cnet.
In case there was any doubt, many freelancers do part-time jobs, corporate work, teaching work, contract work, and other money-in-the-bank gigs. Otherwise, many wouldn’t survive. Then there are those freelancers who write for pubs like the New York Times and top glossies who can only afford to do so because their domestic partner picks up the financial slack. Others rely on their savings from their former corporate gigs (lawyer, communications manager, etc.) to fund their newfound high-profile journalism careers. So reinvention — and having other pursuits outside journalism — is entirely possible.
Ultimately you have to do what’s right for you. And if you want to be a full-time magazine freelancer, I say you start pitching small magazines now and start trading up as soon as you can. Why wait?
February 1st, 2008
Denis writes: I’m 23 and just started doing freelance work this year. I did work for three different clients and I didn’t receive more than $600 from any of them. So I’m not going to receive a 1099 from any of them. Do I still have to report that income? If so, then can I deduct expenses such as internet and computer accessories? I just wanted to know what you think based on your past experiences.
I answer: Congrats on starting to freelance. Exciting! As for your question:
(1) From what I understand, and what an accountant once told me when I was starting out more than a decade ago, technically you have to report to the IRS (pay taxes on) any income you earn as a freelancer. Your clients might report that they paid you $200 for a job, and through its omniscient brain, the IRS could catch wind of this and come after your self-employed ass for the money it’s due. Or something like that.
That’s not to say I haven’t heard of freelancers doing the occasional one-time $100 job they knew the client wasn’t reporting and electing to keep that information to themselves, not that I’m advocating trying to screw the government out of its hard-earned war funding or anything. Mess with Uncle Sam at your own risk.
(2) Without being a financial professional, and without knowing your situation, it’s impossible (and professionally irresponsible, not to mention risky) for me to advise you what to do. But here are a few questions for you to ask yourself:
- Do the city and state in which you live require you pay business taxes? If so, you may owe them money too. Check your city and state licensing departments to find out.
- How much income are we talking about anyway? If it’s just $100, you might be able to go away quietly into the night without any political entity being the wiser (see above), not that I’m advocating you do. If it’s $1,500, I suggest you talk to a tax pro who can advise you how much to pay up. H&R Block has a free “Ask a Tax Advisor” service on their site that might be helpful. Or you could get TurboTax, which supposedly walks you through every little detail of filing your taxes.
- Do you also have a full-time staff job that’s taking taxes out of your paycheck? How much you’re already sending to the IRS through your day job might affect how much you’ll owe on your freelance earnings. Again, a tax pro who’s looking at the big picture is your best bet here.
- And finally, how much are your business expenses? Yes, you can claim the internet bill and computer accessories if you’re claiming the freelance income. But if the expenses exceed the earnings, you might not owe Uncle Sam any money. Maybe. I dunno. But you still may need to file a form. Maybe. See why you need to talk to a tax pro?
(3) I can’t stress this enough: Don’t rely on people like me who don’t work as CPAs, CFPs, or bookkeepers for fine-grained advice on how to file your taxes. You need to talk to a professional who can assess all the variables of your individual situation and tell you what to do. Or you need to get a program like TurboTax to walk you through it. Don’t give the IRS a reason to audit you, which would only land you in an accountant’s office anyway.
AFTERTHOUGHT: You may also want to read this post, on business licenses and the IRS definitions of “hobby” and “business.”
Got a question about self-employment or career change I don’t need a financial degree to answer? Ask away.
January 27th, 2008
It’s the most wonderful time of the year (that is, if you’re a CPA). That’s right, folks, tax season is upon us. And not surprisingly, I’ve had a couple requests recently for a round-up of this site’s past posts on paying your freelance taxes.
Before we get to the round-up, I’d like to take this opportunity to remind you that I’m a freelance writer, not a financial professional. Tax laws change every year, and no one knows their nuances better than your friendly tax professional. So although you can get some initial pointers from a freelance blog, I wouldn’t substitute them for the almighty input of someone who’s trained to fill out tax returns. Capiche?
OK, back to our regularly scheduled programming…
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January 24th, 2008
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