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

  Ready to talk freelancing? Here we go!

In THIS ARTICLE, I wrote about how to protect yourself when freelancing for lots of different places.

One of the points in the article talks about how, as I mentioned in my previous post here, different places you might sign up to freelance for or with are going to require some type of taxpaying identifying number. For most individuals, this number is your social security number. They are indeed required by law to ask for this information and retain it on file if they are in or do material business in the United States. Just asking for personal information is not a sign of a scam, but it is a sign to proceed with caution, particularly if it’s a new company.

First, before you ever give your identifying information to a company, be sure to check them out. How long have they been in business? Can you contact other freelance contractors who have worked for them before and verify they are legit and not scamming folks? And most importantly, do they list full, real contact information so you can reach them - an email address and website is not enough, neither is a PO Box. You need a real phone number, full mailing/postal address and physical address and preferably a contact name as well.

Even with all this, it’s still not a great idea to go spreading around your social security number every time you sign up to work for a website or freelance a job with a company. You may think they are legit, but you never know about their security of their online servers and where they keep their database with your personal information and how secure that is.

So the better choice is to get an employer identification number, or EIN, from the IRS, and use it in place of your social security number.

An EIN is an employer identification number, and in the US, it is a legal substitute for giving your social.

Now, if you are only looking for a little part-time income, and are not planning on professionally freelancing much at all, getting an EIN might be more trouble than it’s worth. If, however, you plan to grow your business, intend on making a career out of freelancing, I suggest you get one as soon as possible.

Things to consider prior to signing up for a free EIN: An EIN makes you an ‘official’ business, and as such, you will have to file and claim the income on your taxes as self -employment, and the EIN will be treated as though you own a sole-proprietorship.

Now, the good part of that is you can take more deductions as a business than you can with just misc. income. The downside, you have to pay self-employment tax at the end of the year. If you make more than a few hundred dollars, the EIN likely benefits you more than it would cause problems, and if you don’t have a lot of business expenses, you can still take the standard deduction, but at least with the EIN, you have the choice.

Applying for an EIN is free - you can do so online through the IRS’s website at:

http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

You can either make a freelancing ‘business’ or you can choose your name or pen name as your ‘business name’.

Me, personally, I have two businesses - one is Accentuate Services, where I have an EIN under that business name. I’ve been in business since 1994 with that business name, but I used my social security number as a sole proprietorship until 2000. Prior to 2000, I worked only with people I knew and had met in person, locally. When I began to expand my freelance business and work it full time instead of part time, and started providing virtual services online, I applied for the EIN and have used it ever since.

My other ‘business’ is my writing. You see, I don’t use my real name as a writer or online. I used a registered pseudonym: Michelle L Devon. This registered pseudonym is able to be used in place of my real name for several reasons - 1) I filed a fictious name license, 2) when I applied for my second EIN with the IRS, I registered my ‘business’ name as Michelle L Devon. I use my pen name as my business name. Why? Well, Michelle L Devon is not my legal name. Because of this, when someone pays me, I would have to reveal my real name to a bunch of people to get a check I can cash or deposit at my bank.

If, however, as I did, I registered for an EIN to make my business name my pen name, then I can take that EIN paperwork to the bank and add my pen name to the signature card of my bank account and thus I am allowed to cash or deposit payments into my bank account, without having to tell any of the contract places what my legal name is, social security number, and home mailing address is - I never have to reveal my real name or information to anyone, and it’s all perfectly legal.

NOTE: some banks require a business account when you do this, some don’t. Some business accounts charge a monthly maintenance fee - just another thing to keep in mind. This maintenance fee is deductible if you itemize deductions.

If you’re worried about freelancing for someone because they are asking for your social security number, having an EIN is an easy, free way to bypass the social request, give the EIN instead, and if you are freelancing full time as your career, it may give you some tax breaks at the end of the year too.

Unlike a social security number, an EIN cannot be used by itself to establish credit, identify an individual (it only identifies a business), or to start charge accounts with vendors - all of those things require the social of the principals of the business or articles of incoproration from from a business to do that. A social security number, on the other hand, can be used for identity theft, to establish credit and charge accounts, and to identify a person. Of the two, and EIN is absolutely the safest way to go.

Keep freelancing!

Love and stuff,

Michy

PS: I didn’t start my work day until almost 4pm today. THIS is the freedom that freelancing as a career can afford you. I didn’t even have to call my boss to call in ’sick’!

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

  Hi everyone! Michelle L Devon here, or Michy, if you will.

A few months ago, I posted a link to Today.com in my writers forum, letting folks know it was a legitimate paying lead for freelance writers. I had verified the lead with others who had written for Today.com, but  I never actually came over here to sign up myself. Strange, huh?

Well, tonight, after seeing how everyone was doing, and being a glutton for punishment, not to mention loving to blog, I decided to sign up to blog for Today.com myself, and add just one more blog to the long list of existing blogs I manage. Call me crazy!

The result of that decision is this blog, called: Freelancing!

On this blog, I will be writing about freelancing tips, hints and strategies. While I’ll primarily focus on freelance writing, I will also be talking about other freelancing strategies and avenues for income while working from home or being self employed. These strategies may include things such as paid-to-blog, paid-to-read, bid sites (such a oDesk, Elance and Guru), as well as discussing how to promote a freelance business - regardless of the services or products your company provides - through avenues such as article promotion, advertising, pinging, link reciprocity, social networking, press releases and more. Also, I intend to discuss some of the legal and fiscal aspects of freelancing, including some potential pitfalls that sometimes cause self-employed professionals to give it up and go back to the corporate world, and ways to prevent that from happening.

Again, I will focus mostly on writing, because that is the biggest part of what I do, and any good company needs to be able to ‘write’ well, or at least hire someone who can, to promote the company… but mostly, I want this blog to be about the struggles and triumphs of freelancing, in general, for those who want to build their own freelance business, regardless of the services provided.

Soon, I will have some great links and places to visit in the blogroll here to help with your freelancing career, along with some neat tools to subscribe to this blog, my newsletter, or other things to help you build your freelancing career, particularly if you are wanting to be a freelance writer, but for anybody looking to freelance for a living, give up your day job, or just bring in a few hundred bucks more per month.

Thanks for visiting, and I hope you’ll keep coming back everyday for new updates. I’ll do my besst to update by 10am, central time, Mon-Fri, at a minimum, sometimes more than that!

Love and stuff,

Michy