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(Art credit: Kathryn Sheldon) Do you have something you absolutely love and hate about yourself? I can think of a few things, but the one that creates a lot of dissonance for me is my tendency and ability to plan. It’s a blessing and a curse. On the positive side, I can be relied upon to be as prepared as possible in any given situation. From packing for a family vacation to coaching a client or giving a keynote talk, you can bet your bottom dollar I will have done everything in my power to make sure it goes as well as possible. But on the darker side, my planning can lead to being overly committed to a plan and trying to control people and situations to ensure things go according to the said plan. And you know, nothing good ever comes from that (just ask my husband and kids when I’m on a roll). No one likes being bossed around and told what to do. Illustrator Lisa Congdon refers to this tendency as “future tripping”: worrying about what could happen instead of being in the moment. So, it would seem I have a bit of a conundrum on my hands: I like the comfort and sense of control that planning affords me, but I don’t want to miss the spontaneity of a moment or connection with a human I care about because I’m planning for the next one. If 2020/2021 has taught me anything, it’s to embrace paradox, i.e., the ability to hold competing thoughts or feelings at the same time and thrive anyway. Planning is a perfect example of how we can embrace paradox and THRIVE in our life and business. If you’re interested in digging into this idea more, here are 3 actionable ways that planning can support you in life and business while you stay present to the people, experiences, and opportunities that lead to unexpected joy. 1) Reframe your relationship to goals and outcomesHere’s the thing about traditional goals – they are something you don’t currently have, are linear, and exist in the future, where you supposedly become a “better” version of yourself. Is it any wonder they often feel so restrictive and downright mean? What if we looked at goals the way fashion designer Bethany Yellowtail does? In Grace Bonney’s In the Company of Women, Bethany says: “I don’t see success as a linear rise to money or fame, but rather as a full circle that leads me back home with the things I set out to accomplish.” Option to investigate further: If Bethany’s approach appeals to you as much as it does to me, I invite you to consider the following question: What accomplishment(s) would make me feel empowered, proud, and that I’m living life on my own terms? 2) Get out of your headWhen we ruminate about things we feel we should plan for but have done nothing about, the “problem” takes on greater proportions – from a bad night’s sleep all the way to catastrophizing about the state of the world and its imminent demise (or is that just me?). The answer: take action, seek answers and/or guidance, and you’ll likely realize it’s not nearly as bad or hard as you imagined. For example, before we embarked on a full gut kitchen renovation (still in progress, check out my Instagram stories for pics!), I was literally losing sleep over how we’d manage without a kitchen for 3 months. In these scenarios, all I saw was stress, mess, and bad food. To be fair, that isn't far off the mark, but what is different is how I feel about it. The game changer? Googling “how to survive a kitchen renovation” after one such worry-filled night. A couple of blog posts later, I had a plan of how to set up a temporary kitchen and list of what I’d need and what I wouldn’t. Plan in hand, it’s been far easier than I could have ever imagined. Option to investigate further: What problem(s) could you put within the context of a google question and take action on? 3) Embrace the Stockdale ParadoxIn the book Good to Great, Jim Collins shares the story of Jim Stockdale, the highest-ranking United States military officer in the “Hanoi Hilton” prisoner-of-war camp in the Vietnam War. Stockdale shared how he survived torture and an eight-year imprisonment: “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.” When asked who didn’t make it out, he responded, “That’s easy, the optimists.” You see, the folks who didn’t confront the brutal facts simply couldn’t survive the hardship. I have tried and tested this method and it works. When I was making the decision about whether to close one of my businesses 8+ years ago, my husband poured me a glass of wine and said, “Let’s look at the brutal facts.” And we did. What would happen if I kept both businesses? What would happen if I closed one? Which one would I close? How would I get the remaining business up to speed to meet our income goals, etc.? It was enormously helpful and not at all brutal. It freed me up to make the best possible decision and create a plan for it to succeed. Option to investigate further: What brutal facts are you avoiding? What are the questions you could ask that would elicit clear answers? Who could help you do this? (It’s easier with support!) If you’re looking for guidance, community, and a dose of cheerleading as you make plans that support your personal and professional growth, I invite you to join my community at https://justineclay.com/subscribe/. You’ll receive monthly articles to motivate and guide you, and you’ll also receive my free actionable 7-step guide to getting more high-quality clients and getting paid what you’re worth. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/23/where-goals-fall-short-a-guide-to-wholehearted-planning/
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(Art credit: Pedro Gomes) This post is provided by our partner, MetroPlusHealth. Find affordable health plans for New Yorkers of all ages from MetroPlusHealth. As a freelancer, you know the drill of “you do the work, we pay you.” But sometimes, the work can be too much. Since you already have things to worry about, let us worry about you – help you keep good health at the top of your to-do list. Our Healthy Rewards program gives our members a way to earn perks while they boost their health, quality of life and well-being. The idea is simple: When you do things that can lead to better health or avoid problems, we reward you! Rewards categories include: · Health & Wellness · Checkups & Screenings · Mom & Baby · Health Condition Management How does the Healthy Rewards program work? At MetroPlusHealth, we don’t cover our members just when they are sick. We want to keep you healthy, too. Most of our plans pay you up to $500 to work out and offer you a ride to and from the doctor. Plus, finish our “just drink water challenge” and you will earn 150 points (a $15 value in MetroPlus Rewards). The rewards are popular items such as: · For physical activity – baseball mitts, basketballs, quilted sleeping bags, and activity trackers · For diet and health habits – blenders, digital thermometers, polarized sunglasses) · Other rewards simply help you relax and have fun You can also earn rewards for preventive care. You will get points when you see a primary care provider within 60 days of joining our plan Or, when you take our Step-Up Walking Challenge. It's as easy as earning, tracking and shopping. And, you will get FREE SHIPPING on every order! Join our family. It’s time to reward yourself. You do good work for others; now let us take care of you. Join the MetroPlusHealth family, and get a health plan made just for Freelancers Union. Here’s what our members have to say about our rewards program. Learn more and see how you can gain from the MetroPlus Rewards Program. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/22/getting-rewarded-for-healthy-living-is-simple-with-metroplushealth/
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(Art credit: Karen Fischer, "Every Man Has a Mountain") If you have significant tax debt, cleaning it up may be the ultimate holiday gift that you can give to yourself as a freelance business owner. Not only will it put you more in control of your finances, it will also free you from paying burdensome interest, penalties, and fines related to back taxes. One of the ways to do this is to file for an Offer in Compromise (OIC). An offer in compromise allows you to settle past due taxes for an amount that is less than the full amount owed to the IRS. The IRS must agree with the taxpayer that payment in full will create a financial burden. Usually, an OIC is reserved for taxpayers with tax liabilities greater than their net worth. If you have already filed for an Offer in Compromise that has been accepted by the IRS, the good news this holiday season is that the Internal Revenue Service is now allowing taxpayers who have had an offer in compromise accepted by the agency to keep their tax refunds, instead of the previous policy of having those refunds applied to their outstanding tax debt. Even if you have an Offer in Compromise in place, you may be able to receive your tax refund under new IRS guidance. When you enter an OIC with the IRS, you usually also agree to allow the agency to apply any tax refunds against your tax debt. Now the agency is also offering what they call an offset bypass refund (OBR) to many taxpayers with an OIC. The agency says this is to “help taxpayers experiencing hardships” and will “remove barriers for taxpayers considering the OIC program.” This means that if you are eligible for a tax refund and the IRS accepts, or is in the process of reviewing your OIC, you may be eligible for an OBR so you can use the refund to help you cover your living expenses instead of your tax debt. These changes are effective November 1, 2021. The IRS has also stated that if you file an amended return, that action could cause your refund to be applied to an existing debt rather than being sent to you. If you have questions about filing for an OIC, requesting an OBR, or other matters related to tax debts, it is best to consult a tax professional experienced in IRS tax resolution matters. They can guide you about your options, how to structure an OIC, and consult with you about other ways you can resolve your tax debts. Take heart this holiday season, even if you have significant tax debt that is a burden to you and your freelance business. The OIC and OBR program and the less restrictive rules can help you make a fresh start for 2022 and alleviate back tax stress that can take a real toll on your well-being and financial situation. Jonathan Medows is a New York City-based CPA who specializes in taxes and business issues for freelancers and self-employed individuals across the country. He provides tax, accounting, and business articles for freelancers on his website, http://www.cpaforfreelancers.com, which also features a free newsletter, blog, and comprehensive freelance tax guide. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/22/owing-back-taxes-doesnt-have-to-mean-missing-out-on-refund/
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(Art credit: Andrea Hernandez, "Aguas") This article is posted with permission from our partner Lili. Get the digital bank account designed for freelancers with Lili and manage your business expenses, estimate your taxes, and save for a rainy day all with zero account fees. Start a Lili account today. At first glance, showing “proof of income” as a freelancer can feel daunting. Since you’re not always earning the same amount of money from the same source each month, it requires a little more organization and preparation than it does for full-time employees. However, providing proof of income is actually very easy and is mostly a matter of staying organized and keeping records of your financial activity as a freelancer. In this post, we’re breaking down everything you need to know about proof of income, including what it is, why you need it, and the documents you can use to provide it. What Is Proof of Income?Exactly what it sounds like: some form of documentation stating how much money you earned during a set time period, usually a year. The exact format depends on who is requesting it, and some documents are considered more credible and authoritative than others. We’ll elaborate on the different options below. Why Do You Need Proof of Income?As you navigate adult life, there are certain moments when it’s necessary to demonstrate your proof of income. Many of these moments are actually significant milestones, and pave the way for exciting new life developments, like owning a car or moving into a new home. Here’s a general list of the most common reasons for needing proof of income:
All of these activities (besides filing taxes) involve someone lending you money or covering an expense for a set period of time. This requires trust — that you’ll make good on your side of the exchange by fulfilling your payment obligations. Banks, insurance and credit card companies, and other types of lenders need to know that you’ll honor whatever commitment you’re making by becoming a customer, a tenant, or other type of borrower. How to Provide Proof of IncomeFor employees, proof of income is straightforward. It’s typically a combination of a W-2 form that is provided by the employer and your latest bank statements. The W-2 form is especially accurate since it shows your true income as a factor of your wages plus deductions. Since freelancers don’t receive W-2 forms, they turn to other types of documentation. Some ways to prove self-employment income include: 1. Annual Tax ReturnThis is the most credible and straightforward way to demonstrate your income over the last year since it’s an official legal document recognized by the IRS. Note that you’re only required to pay income taxes on payments over $600, so it’s possible that your tax return will underestimate your total earnings. This is perfectly OK, but you should acknowledge it and include supplemental documentation for income that wasn’t included (such as a bank statement). 2. 1099 FormsThis is a tax form that’s sent to you either electronically or in the mail from anyone who paid you more than $600 throughout the year. The payer is responsible for filling this out and sending it to the IRS, as well as a copy for you to use as reference when filling out your own tax return. So if you don’t have your tax return on hand, you can use 1099 forms. 3. Bank StatementsNeed to report self-employment income without a 1099? Bank statements are your best bet. If you only use one account for both business and personal banking, you must clearly highlight the business-related payments and expenses to indicate what’s relevant as income. This is a great reason to keep a separate account for your business, as it’s much easier to reveal only what’s needed to the requesting party. 4. Profit/Loss StatementsThis is a fancy name for documentation that shows the overall revenue, cost, and profit made from your freelance work. It’s best to regularly track your income and expenses as it helps you make better decisions and plan for business growth. You can have an accountant set it up for you, or you can create a spreadsheet on your own. 5. Self-Employed Pay StubsIt might sound silly, but you can create pay stubs even if you’re self-employed for record-keeping and to demonstrate proof of income. You can create these yourself or use a pay stub generator. To be considered legally valid, a self-employed pay stub must include:
The longer you work for yourself, the more that providing proof of income becomes second nature. Don’t sweat it, you’ll get used to having the right documents on hand when these moments arise. The most important thing is to stay organized and track your business payments and expenses. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/16/how-to-show-proof-of-income-a-guide-for-freelancers/
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(Art credit: Sisi Recht, "Double Exposure") This post is provided by our partner, MetroPlusHealth. Find affordable health plans for New Yorkers of all ages from MetroPlusHealth. The holidays are here, bringing with them opportunities to enjoy fun times with family and friends. The holidays can also be a stressful time for freelancers, though. It’s easy to get run down when trying to keep up with work assignments and a steady flow of social commitments. If you find yourself running out of energy at work, take the time to do two things: · Get the health care you need. Don’t wait until “feeling lousy” turns into “flat on your back” before using your health insurance. Health professionals can help uncover what’s wrong and provide a plan for getting you better. · Take time to exercise and eat right. Do you tend to work so hard that you never have time to stretch, go for walk or prepare healthy meals? You can break that cycle to feel better – and be more productive at work. MetroPlusHealth can help you get more done by helping you stay in top form. Medical care that matches your busy schedule You can always see a doctor right away, even from the comfort of your home! With MetroPlus Virtual Visit, doctors are available 24/7. Just login on your smart phone, tablet or computer. With Virtual Visit, urgent care, online therapy, and initial online psychiatry visits and follow up visits are FREE as part of your MetroPlusHealth coverage. Guidance and ideas for maintaining a healthy lifestyle Essential Plan members can use our gym reimbursement program for big health results at the least cost. To help you stay healthy, we will pay you back up to $200 or the cost of your gym membership (whichever is lower) every 6 months. That’s $400 per year. Is your spouse also a MetroPlus member? Then they can be reimbursed up to $100 or the cost of your membership. You can get these payments every six months. If you want to get healthy or stay healthy, join us! Our Essential Plans are for those who don’t qualify for Medicaid. You can enroll in the Essential Plans all year long. Learn more here. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/15/gearing-up-for-the-holiday-dash/
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(Art credit: Pedro Gomes) This article is posted with permission from our partner TaxAct. File your freelance taxes with confidence using TaxAct’s easy-to-use tax software. Freelancers Union members get 25% off the cost of federal and state tax filing. Despite all the perks that come along with being a freelancer, paying taxes can quickly make you want to crawl back into the arms of a traditional employer. But, before you launch into complete panic mode, work through this tax planning checklist to prepare yourself for paying Uncle Sam. 1. Put 30 percent of your paycheck in savings.Tax time is often synonymous with refunds, but that isn’t always the case for a freelancer. Since you’ve received payments from clients all year without any taxes taken out, it’s now time to give some of that money to the IRS. To prepare yourself for tax season, it’s in your best interest to tuck away at least 30 percent of each paycheck into a savings account to pay your taxes. This will help you avoid the need to raid your emergency savings fund because you neglected to save up to pay Uncle Sam. 2. Know the filing deadlines to pay quarterly estimated taxes.Freelancers don’t only need to pay attention to the tax filing deadline. There are three other tax due dates throughout the year to mark on your calendar. These dates are known as the deadlines to make quarterly estimated tax payments. The IRS requires estimated tax to be paid on any income that does not have income tax withheld. The filing dates are typically: April 15, June 15, September 15 and January 15 – but can fluctuate if those dates fall on a weekend. Failure to pay quarterly taxes could result in an underpayment penalty assess by the IRS at the end of the year when you file your annual return. Don’t forget this step during your tax planning. 3. Gather all your 1099s.Even if you file quarterly estimated taxes, it’s important to hang on to the 1099s that arrive in your mailbox come January. The 1099-MISC is similar to Form W-2 but is designed for those who are self-employed and receive payment from a client for specific goods or services. For example, contractors, independent consultants, writers, graphic designers and musicians are just a few of the professions that should receive a 1099-MISC each year. The IRS also gets a copy to make sure you’re paying your fair share. 4. Figure out your deductions for better tax planning.When filing your taxes, you may be surprised by all the options for deductions. Deductions help reduce your tax liability, thus freeing up more money to reinvest in your business. Common deductions include home office space (even if you’re a renter), business travel expenses and contributing to a retirement plan. Be sure to do your research while tax planning, and keep receipts throughout the year, so you can deduct the accurate amount on your return. 5. File a Schedule C.Just like the traditionally employed, you need to file your annual tax return in April (the exact date often fluctuates). For tax year 2021, the tax filing deadline is April 15, 2022. Always file a return even if you paid estimated taxes each quarter. Schedule C is an IRS tax form that reports income or loss from a business you operated. While you aren’t always required to file this form for tax purposes, it’s a great way to analyze your business finances from the year. The form also factors in all your deductions, so you’ll pay taxes on your profit and not your gross income. Additionally, you can’t operate a business at a loss forever. If you experience a loss year after year, eventually the IRS will insist your employment isn’t a job. Instead they’ll classify it as a hobby. When that happens, you can no longer take the deductions. Completing a Schedule C will help you better understand the success (or failure) of your business. 6. File a Schedule SE.Along with income taxes, the IRS also requires you to pay Social Security or Medicare taxes as a self-employed individual. Together, that tax is called “self-employment tax”. If you earn $400 or more of net profit, determine the tax due on your earnings by filing a Schedule SE, Self Employment Tax. 7. Know these two things.
It’s easy to assume you can get out of paying quarterly estimated taxes on side hustle income if you’re already paying taxes from a traditional job. But, you’d be wrong. You still need to file quarterly estimated taxes on all additional income. Otherwise, brace yourself for a big tax bill and potentially a penalty come April.
Perhaps you don’t have a full-blown side job, but you’re still earning money by selling your belongings on eBay or renting out a spare room in your home on Airbnb. That still counts as taxable income. And you must treat it as such. However, there is a small tax loophole for renting out a room in your primary residence. Any room only rented out for 14 days or less doesn’t trigger the need to pay taxes on the income. 8. Always save.The first and last points to good tax planning are to save your money. You never want to get to tax season and realize you owe the IRS without any money in the bank to pay up. Get in the habit of saving at least 30 percent of all income, no matter how it’s coming in. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/14/tax-planning-for-the-busy-freelancer/
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(Art credit: Kathryn Sheldon) It’s that time of year again, for those of us who celebrate winter holidays. You’re likely plotting presents to give to your family and friends. Have you ever thought about what you might give yourself as a freelancer? Though freelancers come in all shapes, industries, and sizes, these year-end self-care tips can help you reframe your freelance business to work for you individually. Get in a giving moodOnce the holidays roll around, start thinking about what it would look like to invest in your business for the new year. Here are four best practices to try annually: Plan to level up. What will help you offer higher-quality services next year? For me, this means finally getting a business email and a calendar tool. For you, that might be a web revamp, new paid tools, or a contract review. Show reciprocity. Building a network of like-minded freelancers is one of the most reliable ways to get client referrals. For example, if a fellow freelancer is overloaded, doesn’t provide the service requested, or doesn’t have experience with your niche, they may pass a project to you. Of course, to get referrals, you should also give them. Consider: Are there any leads you can refer to others? Send loyal clients a gift. When clients feel valued, they’re more likely to continue booking your time and skills, i.e. a gift to your clients is a gift to yourself. Sending a bottle of wine or some holiday treats is a great way to retain clients, and to make sure you have a current address on file Give yourself a raise. Being a business owner means coming to terms with the fact that no one will give you a raise if you don’t. That said, you’ll do yourself a big favor to notify clients well in advance. Be clear about the rate change and date of effect. You don’t need to mention a reason for the raise, but if it motivates you to have one, it makes sense to raise rates with cost of living, when your services are in demand, and when you’ve made investments to level up your skills. The gift of preparationOne of the best ways to ease into a restful holiday is to set deadlines for all remaining work and boundaries around when you’re out of office (OOO) well ahead of time. Sign off with your clients. Let clients know when you’ll be OOO, ask if you can take anything off their plates in the new year, and set expectations for when you’ll send over current deliverables and follow up on upcoming ones. If you like to share relevant holiday greetings, schedule their send ahead of time. Finish your work early. Set yourself up for success by planning ahead. What do you need to finish and by when? What is your hard deadline for closing your laptop? This isn’t just a way to meet our clients’ expectations; it’s also a commitment to reducing stress and last-minute work whenever possible. Be firm about your off time. Set an automated email response and whatever you do, resist the urge to respond to messages while OOO. Most of the time, your client’s emergency is not your emergency...unless they agree to a rush fee that makes it worth your while. Permission to let go of what doesn’t serve youAlmost no one freelances long-term without a love of the work, but we often forget how crucial keeping our inner employee happy is to the sustainability of our business. Say goodbye to bad clients. You don’t deserve a constant barrage of messages, unnecessarily critical feedback, or to chase clients to pay you month after month. Remember that letting go of the seeming “security” of a bad client often pays dividends in peace of mind. Go after clients you want. What’s more, letting go of stressful or toxic clients frees up your time to find better ones. Too often, we take what we’re given instead of going after what we want. What has your bad client taught you about what you want? Make a list of potential clients that fit the bill, and reach out in the new year once their budgets have renewed. Leave the office behind. OOO should mean more than sitting in the other room. If you can, get far away from your day job. Whether you invest in a day trip or an extended road trip, give yourself space so you think fondly of your non-ergonomic chair upon your return. (On second thought, maybe let go of that, too.) The gift of supportThough owning a freelance business can feel isolating, if there’s anything Freelancers Union stands for, it’s that we’re all in it together. We can all use various kinds of support at different times: A freelancer community. There are a variety of free and paid freelancer communities, including something for everyone’s tastes and availability. Aside from the opportunity to get and give advice, the opportunity to connect with others who understand you is invaluable. Offloading over-capacity. Once you get to a point where you can’t handle the amount of work coming your way, consider looking into hiring a subcontractor or Virtual Assistant (VA). Freelance communities can help extend your network and find the perfect person for you. Business coach. Many freelancers benefit from engaging a coach, who can help you get clear on your goals, roadblocks, and next steps. Ask your network for a referral! Therapy. When you are the face of your business, the emotional lines can get blurry. Thankfully, therapy has gone online with the rest of the world, making it that much more accessible. I’ve personally engaged a counselor who specializes in working with expats, and it’s made a world of difference. The gift of timeIf there’s one thing we could all use more of, it’s time. Thankfully, you’re the boss of yours - even if it doesn’t always feel like it. Set new priorities that give you joy. How do you want to spend your time in the new year? Maybe you’d like to dedicate one morning a week towards learning time. Perhaps you’ll only take calls one day a week. Maybe you even plan to take Fridays off. Yes, you can do that. Lots of freelancers do. Try a new easy, daily habit. Do you want to create before you consume? Try 750 words or a daily doodle prompt. More mindful? Try Yoga with Adriene or a 5-minute meditation you can do anywhere. The key is to keep it short and easy so you can build a habit (which takes at least 2 months). Don’t stress if you mess up. I know as much as anyone it can be tough to stick with these things. If you make a mistake, remember that you get to wake up every day and try again. ‘Tis the season of givingThe year-end holidays are a time of reflection for many freelancers. Yet the most important gift you can give yourself as a business owner is the permission to - yes - slow down and take the time you need to rest. I like to tell my clients some tongue-in-cheek version of, “My really cool boss allowed me to take off until (date). Yes, my boss is me.” via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/13/self-care-gifts-to-give-yourself-as-a-freelancer/
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(Art credit: Karen Fischer, "Skim Skirmish") Investing is essential and can be the difference between retiring and not retiring. Everyone needs it, even if you have no money saved. After working with freelancers for more than 20 years, I’ve seen plenty of hesitation about investing and specifically for retirement. My first piece of advice: Make it a priority! Keep reading and we’ll show you how. Before you begin, make sure you have an emergency fund. Ideally, freelancers need a minimum of nine months of expenses saved in a savings account. If this is overwhelming; don’t worry - assign it as an ongoing goal but still get started with investing. Consider a high yield savings account (FDIC insured) such as marcus.com, capitalone360.com and americanexpresssavings.com. Right now they are paying approx. 0.50% interest, which is higher than most banks. More importantly, putting that money in a savings account makes it harder to get to so you won’t spend it as easily! Another easy freelancer tip: While you are setting up your emergency savings account, create one for taxes. Every time you get paid, put at least 20% into this account. When quarterly tax time rolls around, the money is set aside. The next step is to open an investment account. Think of these investments as money you won’t touch for at least three years. There is a tremendous amount of volatility in the markets, but if you don’t need your money for at least that time, you can handle the ups and downs of the market and can make more in the long term. Take, for example, the S&P 500 index - a group of the 500 most actively traded stocks and one of the most popular types of investments. The average returns of the S&P 500 over 20 years has been 7.45% a year! If you started with $1,000 and put it in a savings account, you would only have $1,105 after 20 years. If you invested it in the S&P 500 instead, it would be $4,209. That’s a lot of money to leave on the table! The long list of places to open an investment account can be an obstacle; these options will easily get you started: 1. Vanguard and Fidelity are the largest mutual fund companies. They offer a wide selection of funds that are the cheapest in the industry: minimums to open are $1,000 and $0, respectively, and afterward you can add as little as $25 at a time. 2. Another suggestion is robo-advisors. My favorites are Ellevest, Wealthfront and Betterment. Their fees are 0.25%/year (also super low) and their minimums to open range from $0 - 500. Once you open the account, share your goal or timeline (i.e., 3 years or 10 years) and they will invest it accordingly. Great choice for those who want to set it and forget it. 3. A third option is a combination of savings and investing. The Acorns app has been a great resource for my freelance clients who want to save AND invest at the same time. It rounds up your debit or credit card purchases on a linked card to the nearest dollar and invests the change. For example, if you charged $3.50 at Starbucks, you would get charged $4.00 and they would invest the $0.50. They have a range of investments from safe to aggressive and even ESG (environmental, social and governance). My clients that use it are pleasantly shocked at how much they save AND invest without thinking about it! There is a monthly fee, which I’m not a fan of, but overall, this will easily jumpstart your investing. Once you’ve opened the investment account, let’s pick an investment. Most people start with a mutual fund - a group of stocks and bonds. The benefit is diversification (spreading your risk over multiple stocks). Keep your fees low by sticking to index funds. Many start with the popular S&P 500 index fund. Another preferred mutual fund for first time investors is an Allocation or Balanced mutual fund. This combines stocks and bonds but still returns an annual average of 5-7%. If you decide to open a retirement account, an ideal investment would be a Target Date Retirement Fund based on the year you want to retire. You don’t have to keep it in the fund that long, but if you do, it’ll match your timeframe. Lastly, link your checking account to the investment account you just opened and add to it automatically every month - the amount can be as small as you need, just make it a priority to do regularly. You won’t miss the money, and it’ll add up so easily as you invest in the market every month. I often hear from freelancers that they are hesitant to take this step, but you won’t miss this amount on monthly basis - I promise! Let’s get started and meet in 6 months for a financial checkup. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/09/how-to-start-investing-even-if-you-have-no-savings/
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This post was provided by Dinghy. Freelancers Union partners with Dinghy and NSM Insurance Group to help freelance writers say hello to peace of mind with liability insurance crafted exclusively to meet their needs. Get a free quote — in less time than it takes to finish a cup of coffee — here. One of the main perks of being a freelance writer is the flexibility that comes with being your own boss. For the most part, you get to work when you want, and where you want. Working from a different environment (with proper COVID-19 safety measures) and getting a change of scenery can be the perfect spark for your creativity. Working from a café can be a great chance to interact with others and make some new freelance friends, and if the café does a top-notch latte or cinnamon roll, then that’s just a bonus, isn’t it? When looking for a perfect new spot to work from, look for these essentials: - Wi-Fi access - Easily accessible electrical outlets - Plenty of table space - Comfortable seating With the above in mind, we’ve pulled together a list of some of our favorite places to work around freelance hotspots, including New York City, California, and Philadelphia. All information is correct to the best of our knowledge at the time of writing. This is not a sponsored article and neither Dinghy nor our staff has received any kind of promotional gifts or payments for the businesses mentioned in this article. The best freelancing spots in New YorkFreehold Café open 8am-6pm daily While some coffee shop owners may give you a glare when you walk in with your laptop bag, Freehold is aimed specifically at working professionals. The award-winning coffee shop boasts an 8,600 square-foot space, so you shouldn’t struggle to get somewhere to perch. And if you’re up for some fun after the workday is done, the space transitions from a work-by-day café to a party scene at night, with trivia nights every Wednesday and regular comedy and music nights. Think Coffee Hours vary Think Coffee has ten locations in Manhattan, as well as one in Williamsburg. If you like the menu, you could have a weekly rotation to work through them all. How’s that for a change of scenery? These shops are usually busy with coffee-lovers on laptops, so chances are you aren’t going to be the only freelance writer there. Gossip Coffee Open 8am-6pm daily If you have exhausted your favorite playlists on Spotify and are craving a little more action, Gossip Coffee may be the perfect place for you. Serving up coffee, food, pastries and cocktails, it’s well-known for its upbeat atmosphere and ambiance. Top cafés for freelancers in California1294 Sunset Blvd, Los Angeles, CA 90026, USA Open 7am-5pm daily Eightfold Coffee is described as a ‘minimalist, industrial’ space, perfect for getting your freelance work done in a calm environment. It’s popular with the locals, with customers raving that they “love everything about this place — the coffee, the space, the vibe, the service. Favorite coffee shop to get some work done at.” Muddy Paw Coffee LA (Eagle Rock) Open 7am-7pm daily If your favorite co-worker is a four-legged friend, you might think you are limited on a working space. Well, both you and your pup would be very welcome at Muddy Paw Coffee. There are two locations in LA, but if you head to the one on Eagle Rock Boulevard, there is a dog park out back where they can play while you work on the outdoor patio, complete with free Wi-Fi and outlets. Verve Coffee Roasters Open 8am-4pm daily Verve has everything you need for the day: comfy couches, free Wi-Fi, great coffee and communal group tables, if you’re up for making some new friends for the day. Note that power outlets may be limited, so make sure that you come with your laptop fully charged (and a power bank if you are planning on being there all day). Buzz-worthy freelance working spaces in PhiladelphiaVarious locations in Philadelphia Hours vary, check the website for details An award-winning roaster, ReAnimator Coffee’s delicious drinks are what bring people through the door. The low-key, relaxed vibe at each of its locations around Philadelphia is what makes them want to sit down and stay awhile — and makes it a perfect spot for typing the day away. One Shot Coffee Open 7am-3pm daily One Shot Coffee has a drool-worthy breakfast menu with a good selection of vegetarian and vegan options. Pop upstairs and you will find a library where you can set up shop, work and get the inspiration you may need. Elixr Coffee Hours vary, check the website for details With four locations around Philadelphia, Elixr Coffee has big tables, great music and free Wi-Fi. The interior has a rustic aesthetic for a relaxed atmosphere, making it a great space to grab a drink and get that proofing done. Weigh in! What’s your favorite spot for freelancing? Head over to Facebook, Twitter or LinkedIn and join the conversation. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/08/the-best-cafes-for-freelance-writers/
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(Art credit: Pedro Gomes) If your freelance business reimburses contractors for meals consumed while traveling, you can now deduct the per diem portion of meal expenses at 100% according to new guidance from the IRS which covers tax years 2021 and 2022. If you are planning to take a client out for a holiday meal, remember that as part of the HEALS Act instated as part of the government’s COVID-19 relief program, you can deduct the expense as an eligible meal expense. This includes meals from 2021 and those you may have in 2022. This guidance applies to the period from Jan. 1, 2021, through Dec. 31, 2022. As a reminder, your freelance business can claim 100% of its food or beverage expenses paid to restaurants if you, the business owner (or an employee or representative of the business), is present when food or beverages are provided, and the expense is considered reasonable. The 100% business meal deduction is designed to help restaurants affected by the pandemic. Keep in mind that under this temporary tax deduction provision, restaurants are defined as “businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption” by the IRS. This means that if you are buying a business meal from a grocery store or convenience store, it is not eligible under these rules. In addition, this provision does not allow certain employer-operated eating facilities to be classified as restaurants What has not changed is that you need to keep your receipts to fully deduct business-related restaurant meals. In addition, you still need to document when, where why and with whom you shared the meal. Specifically, your meals must meet the requirements laid out in the related IRS guidance when it comes to who you share the meal with. It must be: “a person with whom the taxpayer could reasonably expect to engage or deal in the active conduct of the taxpayer’s trade or business such as the taxpayer’s customer, client, supplier, employee, agent, partner, or professional adviser, whether established or prospective.” Be sure to keep your restaurant receipts so you have the documentation needed to reduce your tax bill as much as possible now. Once 2022 is over, unless the 100% deductibility guidance is extended, the rules put in place under the Tax Cuts and Jobs Act will come back into play. This guidance applies for expenses incurred after December 31, 2017, and, under the TCJA, if they are incurred and paid after Dec. 31, 2025, they will not be deductible at all. Jonathan Medows is a New York City-based CPA who specializes in taxes and business issues for freelancers and self-employed individuals across the country. He provides tax, accounting and business articles for freelancers on his website, http://www.cpaforfreelancers.com, which also features a free newsletter, blog and a comprehensive freelance tax guide. via Freelancers Union Blog https://blog.freelancersunion.org/2021/12/07/business-meals-are-fully-tax-deductible-in-2021/ |
AuthorI have 5+ years experience working as a medical transcriptionist. When I am not working, I enjoy sports like playing basketball or judo. I love making friends and connections. Archives
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