Freelancing: Freelance Hints, Tips & Strategies by Michelle L Devon

Hi everyone! Ready to talk freelancing today?

There are a few things to consider prior to starting a freelance career - things like whether you want to work full time or part time as a freelancer, whether you want to work from home, what services you want to provide, etc. These things are important. I actually started my freelancing career offering administrative services, virtual assisting and the like. I later moved to bookkeeping and tax filing, which was actually quite lucrative. After that, I added audio and video transcribing. My goodness, there is a ton of money and work available in the transcription field if you can type fast and don’t mind being chained to a set of headphones all day.

Eventually, I landed an editing gig with one of the freelance bid sites (Elance.com , and yes, I’ll be talking more about bid sites as the blog progresses),  and that led me to editing some ebooks for a small publisher, who in turn referred me to a larger publisher, that publisher was impressed with my work, and that lead to another referral… and editing just became my niche. Within a year, I knew that I no longer wanted to do the administrative services, and since I was writing in my spare time on the side, I decided to combine the two, drop the adminsitrative work, and the rest, as they say, is history.

You’ll eventually find your niche too. My niche is editing and writing services for my freelancing career. I am a freelance editor and a freelance writer, and those are really the only things I do anymore. I love doing both of them, and they require different skill sets, so I never get bored. To start with, decide what you’re good at, then decide what you enjoy (not always the same thing: I was excellent at accounting and taxes but hated that line of work). You might want to start with what you’re good at, while doing what you enjoy on the side, and then slowly balance the two, then phase out the things you don’t enjoy anymore once you’re making money.

Once you’ve decided what you want to do, then you have to set about how you’re going to do it.

It is not as simple as just sitting down and working. Our world is truly a global economy, and I have worked as a contractor for people in Spain, England, Australia, India and more, not to mention people right here in the good old USA. Fortunately, as a freelancer, you don’t need to worry about the laws and taxes in these other locations, but you absolutely need to know about them in yours.

So, according to the government, what do you need to tell them about your business?

TAXES

If you plan to freelance from home, part time, and you hold down a full time job or a part time job elsewhere where you pay taxes, you really don’t have to tell the government much about your freelancing business. However, and this is very important, you absolutely must report all money earned from freelancing on your taxes. If it’s five bucks or 500,000, it must be reported. Now, the amount of money you make, how you make it, and how you are paid become important in how you report it.

I won’t get into the tax code right now, as that is something even tax professionals have trouble understanding, and I’m surely not going to give tax advice either, but the point is that you should know what your tax liabilities and responsibilities are when you start freelancing.

W9, 1099-MISC, IDENTIFYING INFORMATION

Any one business or entity in the US paying you more than 500 in one calendar year is going to be required to send you a 1099-misc for at the end of the year. They will fill out this form by requesting form you an W9. Now, some companies don’t require w9s on file, but will ask you for information the same as what is needed for a w9 and by registering for work with them, registering for their website, etc, you are agreeing to the w9 information being used.

This information will include your name, address, mailing address, account number with the company (if necessary), and some type of tax identifying number. This might include an EIN, TIN or social security number. Tomorrow’s post will talk about what each of these items are and how to choose the right one for you. For now, know that as you go about setting up work for your freelancing business, these companies do indeed have a legitimate right to ask for this information, and in fact, they are required to keep it on file for anyone making more than the threshold.

LOCAL, STATE, FEDERAL FREELANCING REGULATIONS

Another thing to consider when starting a freelance business is going to be  what the business codes are in your area, state, etc. Federally, you are not required to register your business in any way, and if you are a sole proprietor (meaning YOU are the only one to ‘own’ your business, and most freelancers are sole proprietorships, so there’s really not much to do until it comes time to file taxes at the end of the first year (and perhaps at the quarter the following year if your income is significant).

However, with states and city/muncipality codes, some places require that if you operate a business, work from home, you must register that business with your city, state or county. Mostly, this is because of zoning issues and wanting to know if there’s going to be traffic in and out during the day and such. There may be a license or a fee required to start freelancing from home as self employed. You will want to call your local officials to ask those questions before you start making significant money and building your business.

SUPPLIES, SPACE, TIME

Lastly, you want to  be sure to set aside an ‘office’ space in your home, however small it may be. I know this might not seem necessary to you, since you’re working from home, you play on the computer all the time, think it’ll all be okay, but truth is, when you start working from home full time, you are really going to want a place that is ‘work’ and a place that is ‘home’. The lines between the two WILL blur, but you’ll want a designated space just for your work items, work files, information, etc, that is separate from your home.

In the beginning, you’ll want to make a schedule and adhere to it. Once you’re in the swing of things, you can break the schedule and do whatever needs done, when it needs done, but in the beginning, especially if you’re transitioning from J-O-B to freelancing from home, the temptation to sleep in, and piddle around the house will be great. Set aside specific times to work, and specific times to play, until you get used to the new routine.

I wrote an article detailing the top five myths and truths about working from home. Give it a read, and you’ll understand exactly why I’m suggesting you make this schedule and adhere to it in the beginning.

Tomorrow, I’m going to talk a little bit about how to protect yourself when freelancing online, what to look for to show a legitimate opportunity versus a scam, and talk a bit about identification numbers and personal information when checking out freelance opportunities, so stick with me!

Everyone have a good day, and happy freelancing!

Love and stuff,

Michy

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