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Freelancing can be a rewarding career path, and many freelancers achieve financial success. However, to build toward stability and keep your career sustainable, you need pay close attention to your cash flow. There may be times, whether by the nature of the gig economy or crises like the COVID-19 pandemic, that you find yourself receiving lower income than usual. While getting more work is always a nice solution to this issue, it is not always the most realistic one. You must develop strategies that can help you to be more creative and effective in managing your outgoings in a way that avoids the necessity to get into debt. Alongside making a realistic budget and keeping monthly household bills to a minimum, one of the key strategies for cutting your expenses is bartering your freelance skills, rather than paying cash for services. Bartering is seeing a resurgence in our communities, with online groups helping to fill the need for cashless trades. But although this method of commerce has existed for centuries, many freelancers are not entirely confident about the process. It’s only natural that you want to avoid coming across as disrespectful, but that shouldn’t discourage you from reaching out to make a mutually beneficial trade. So, let’s take a look at a few of the positive ways that you can approach the process. Develop RelationshipsBartering successfully doesn’t just come down to trading; it is predicated on a certain amount of trust and consideration. There needs to be mutual faith that what each of you is offering will be provided promptly and of the highest quality. While having a good reputation can help you here, there aren’t many freelancers who can barter purely based on their names. Therefore, you need to approach your bartering process from the basis of building a positive relationship. This is important not just for convincing your target that they should barter with you, but for your own peace of mind. Not to mention that the process is so much more pleasant for everybody involved if neither of you feels as though your interactions are purely transactional — that there’s a genuine connection there. It’s the same approach as you should be taking with networking. People are likely to be much more receptive if you both care about the relationship. This is why it can be easier and more comfortable to barter for services with people with whom you already have a history: There is already a mutual bond of trust and respect that you can build on. Whether or not you already know your potential collaborator, you need to put effort into forging and maintaining professional relationships with them. Talk to them about what they care about in their profession — seek to understand their challenges and what drives them. Share your own needs. On the most basic level, this helps to establish or strengthen a genuine connection. It also gives both of you insights into whether this is an appropriate time to barter for services, and how you can best serve each other’s needs through an exchange of skills. Understand ValueWhatever you’re bartering for, whether it’s healthcare or plumbing services, one of the most difficult aspects of bartering your skills in exchange for services is valuation. Your approach here should consider: ● Your Worth Freelancers, particularly in creative industries, are often victim to the fact that their work is frequently undervalued by the general public. As such, it can be easy to find yourself falling into the trap of accepting others’ views that your work has lower — or in some cases, no — true monetary value. Sometimes it can be helpful to gather resources on current industry rates for your work, or how the quality of the services you can provide add value to businesses. This understanding also extends to gaining the confidence to communicate your self-worth. You understand what you do and why it is valuable, work on expressing that. ● Their Worth To negotiate from a position of strength, you also need to gain a full appreciation of the comparative industry value of their work. If you’re undertaking a big project such as a home renovation and are seeking to barter with a contractor, you’ll likely have already done some research into material and labor costs. Indeed, bartering shouldn’t be your first or only call — it’s important to explore other cost-saving measures, such as planning to complete in affordable stages, hiring tradespeople in more affordable months, and even engaging in some DIY. Whatever the situation, understanding what goes into their pricing and having well-researched points of reference can help you gauge a realistic, fair exchange for everyone involved. Making Your PitchIt’s also vital to remember that, even when you have a prior relationship with your potential collaborator, this is not a “friends doing favors” situation. You are both professionals. Go into the situation with supporting information. This could be in the form of your portfolio of work or case studies to show how your services can add value to theirs. Approach it from the perspective that you have taken careful consideration into the business aspects of the matter, rather than seeking a casual cashless transaction. You may be able to help your chances of success if you prepare a formal proposal in advance. This can outline the scope of services that you are looking for each party to provide, how they will be delivered, and the expected timescale. Don’t treat this as a hard contract at this stage. Rather, use it as a tool to open the dialogue between the two of you; it’s a basis to begin negotiations, and a way to progress the conversation in a positive, professional manner. ConclusionWe live in a changing commercial world, and many of us have returned to bartering skills and services rather than rely on cash transactions. It’s not always an easy process, but it’s important to approach it from the perspective of building a genuine relationship and proceeding in a way that shows mutual value and respect. With some preparation, empathy, and confidence you can make the exchange successful for everyone involved. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/25/how-to-barter-your-skills/
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On Monday, February 22, President Biden announced an important new opportunity for micro-businesses to more easily access the Paycheck Protection Program (PPP), which provides loans to businesses who have experienced a loss of revenue due to the COVID-19 pandemic. The changes create a 14-day window during which the only PPP applications that will be processed are from businesses with fewer than 20 employees, starting Wednesday, February 24, 2021. The opening of this special PPP access period may help freelancers get loans through the PPP more easily than before. The PPP offers forgivable loans to small businesses through the Small Business Administration to help them recover from the financial impact of COVID-19. The overall PPP program is currently slated to end March 31, 2021. The SBA has also earmarked $1 billion of PPP funding for applicants with no employees who are also located in low- and moderate-income communities. The updates to the PPP program also changes how sole proprietors, independent contractors and self-employed workers will have the amount of their loans determined. Instead of calculating the loan amount using the net profit listed on their 2019 income tax Form 1040 Schedule C, freelancers can now calculate the loan amount using their gross income. This has the potential to increase your PPP loan amount by thousands of dollars. As a reminder, PPP loans can be used to cover expenses including payroll, rent, operations expenditures, property damage costs, supplier costs, and worker protection expenditures. The Payroll Protection Program (PPP) loan forgiveness amount will not be considered taxable income at the federal level. This could be a significant tax saving for your business. However, there is not any change in the guidance for state and local tax treatment of PPP funds. Therefore, be sure to check with your own state and local tax authorities for additional information. 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 blog and a comprehensive freelance tax guide. Please note, due to the high volume of inquiries in regard to COVID-19, Jonathan is not able to respond to COVID related requests. However, he is more than happy to chat about 2020 tax filings. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/24/a-window-of-opportunity-for-freelancers-who-need-ppp-funds-just-opened/
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I’ve always had jobs that were hard to explain to other people. I started my career as a teacher. That was the easy one. “I’m a teacher.” That’s a very straightforward job description, one that everyone can relate to. After that, it became more complicated. “I run projects for people.” That can mean a lot of different things. I used to try to define my work by the types of projects I ran. “I run research projects, I design programs for teachers, I create products for companies.” When I started working for myself, it became even more complicated. Now, I had to explain what I could do in a way that made people want to hire me to solve their problems. When you work for yourself, it is crucial to be able to answer the question: “What do you do?” This seems like it should be an easy question to answer. For some solopreneurs, it may be. I’m what people refer to as a generalist. Project management is a skill set that is replicable across all content areas and applications. That doesn’t mean I am the best fit for any project, I am most efficient and effective when I am designing and managing projects in areas with which I’m familiar. It also doesn’t mean that everything I can do is something I want to do or should do. I started working for myself so I could make money doing what I love. That meant I needed to actually define what that meant for me and narrow my offerings for clients to things that gave me what I needed and solved their problems. Getting clear on your offerings and organizing them into replicable packages will not only make it easier to explain what you do, it will also bring you more of the right clients and help you write better proposals that lead to signed contracts and money in hand. This doesn’t mean that you are only offering a one-size-fits-all approach to your clients. It just gives you standard language and a baseline to operate from when you are designing customized solutions. There are four steps to doing this right: 1. Define what you doStart with a list of all of the things you can do. This is just a high-level list. Don’t try to categorize, organize, or think in terms of granularity (e.g., one-offs vs. packages vs. projects), just get it all out on the table. Following a basic brainstorming protocol here is a good idea. 2. Think about what you want to do and what you should be doingThis can be tricky. I know that we don’t all have the luxury of choosing our work. Depending on where you’re at in your career and life, you may need to take all of the work you can get right now, and that’s OK. You can start broad and narrow your focus as you build your client base and learn more about your work. Here’s what to consider:
3. Organize everything into packages, one-offs, and ongoing workThese are ways to not only think about your work but also your business model. You might only want to do packages and not ongoing work, or vice versa.
4. Get feedback from actual clientsAs you present these options to clients and do the actual work with them, you’ll be able to refine them to meet your needs and ensure that you’re delivering work that is relevant and effective for your clients. Put in a little elbow grease and you’ll have a beautiful overview of your work that you can share with clients, pull from as you write proposals, and use on your website. A solid description of your services will make you really stand out with your clients and help you narrow in on the types of work you can and should be doing. © Fruition Initiatives 2021 Fruition Initiatives is not a mental health professional, attorney, doctor, tax accountant, human resources expert, or financial adviser. This information and information contained at www.fruitioninitiatives.com is not intended as, and shall not be understood or construed as, professional advice. Please seek professional advice, that is specific to your context, as needed. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/23/how-to-tell-prospective-clients-what-you-do/
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The emergence of the COVID-19 virus made 2020 a very unusual tax year—with both the CARES Act and the HEALS Act being passed with significant tax changes. Add into the mix Paycheck Protection Program loans and the regular list of deductions that freelance business owners can claim and you have a web of potential deductions to sort through. If you haven’t already engaged a tax professional to help you maximize potential deductions, this is the time to do it, because the 2020 tax year is one which could prove to be challenging if you are trying to do your taxes alone. To help you out, here are some key deduction opportunities and how they relate to both your individual and business taxes. There is a full summary in this PDF from CPA for Freelancers®. Please note, this guidance is subject to change, so check with a tax professional to make sure you have the latest information at the time of filing. 1. The Economic Impact Payment Recovery Rebate Credit (Notice 1444 and 1444B). The Recovery Rebate Credit is a special benefit that many people received in May 2020 and/or in January 2021 in the form of an Economic Stimulus Payment. If you did not receive the maximum amount of the Economic Stimulus Payment, or if your circumstances have changed, you may be eligible for the funds now. The IRS will be able to calculate whether you are eligible and how much of the credit may be available to you if you follow the “Credit Figured by the IRS” instructions on your individual tax return. 2. Families First Coronavirus Response Act deductions. If you were sick in 2020 or the beginning of 2021 due to COVID-19, or you had to take time away from your freelance business to care for a family member who was, you’ll want to see if you are eligible for qualified sick and family leave equivalent tax credits with IRS Form 7202, “Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals.” Form 7202 is a new federal form from the Internal Revenue Service which aims to help those who are self-employed claim sick and family leave tax credits under the Families First Coronavirus Response Act (FFCRA). You may be able to claim these credits on your 2020 tax return, for leave taken between April 1 and Dec. 31, 2020, and on next year’s tax return (for 2021) related to leave taken between Jan. 1 and March 31, 2021. Please note that you cannot claim these credits for the same period as any PPP loan forgiveness you may be eligible for. 3. The Child Tax Credit (CTC). If you have kids, you’ll want to pay attention to the CTC, which is a $2,000 credit parents can claim on their taxes for every child under the age of 17 in 2020 (the same age range for child dependents when it comes to COVID-19 stimulus checks). The CTC is only refundable up to $1,400 per qualifying child). If you have older kids, you can claim $500 for each child aged 17 and 18, or for full-time college students between the ages of 19 and 24. Looking ahead to the 2021 tax year, Biden has proposed a temporary increase to the maximum CTC, to $3,000 for each child age 17 and under, and up to $3,600 for kids under age 6. The proposed credit would be fully refundable and may be paid monthly. 4. Charitable donation deduction. Charitable donation deduction. You can take up to $300 in a cash/check/credit card deduction even if you are taking the standard deduction (not donated goods) in 2020 under coronavirus programs. You must provide the appropriate documentation to take advantage of this deduction. 5. Coronavirus IRA hardship withdrawals. If you are feeling the cash flow crunch due to the economic slowdown caused by COVID-19, the CARES Act may provide some relief in the form of a waiver of the 10 percent early withdrawal penalty. The new rules to take a withdrawal from your retirement account will apply to you, if: o You or your spouse or a dependent was diagnosed with COVID-19 by a CDC approved test. o You have experienced “adverse financial consequences” due to the pandemic. For example, you or your spouse: § Are being quarantined, furloughed, laid off, or you are working less because of the virus or disease. § Are unable to work due to lack of childcare because of the virus or disease. § Own or operate a business and you have lost hours or had reduced hours due to the virus or disease. 6. Paycheck Protection Program (PPP) loan forgiveness. One of the key changes made in regard to PPP loan forgiveness is that it is not considered taxable income at the federal level. This could be a significant tax saving for your business. However, there is not any change in the guidance for state and local tax treatment of PPP funds. Therefore, be sure to check with your own state and local tax authorities for additional information. 7. Changes to Net Operating Losses may also provide additional funds. The Act also makes several important changes to Net Operating Loss (NOL) provisions that may help free up your freelance cash flow. Under this act, businesses can use NOLs from tax years starting prior to January 1, 2021, to fully offset their income. This is a change from the 2017 Tax Cuts and Jobs Act, which limited the offset to 80% of income. The CARES Act also provides that taxpayers can, for tax years 2018, 2019, and 2020, carry their NOLS back to their five prior taxable years, which could result in a tax refund. 8. An expanded interest deduction. The previous limit of 30% adjusted taxable income (ATI) was increased significantly, to 50% for 2019 and 2020. Any business interest expense not able to be applied for this year can be carried into the next year. This increased limit will allow businesses a larger tax break this year. 9. Section 139 Tax Deduction. Section 139 was added to the federal tax code after 9/11 in order to allow businesses, nonprofits, and state and local governments to make tax-deductible disaster relief payments to individuals who have been affected by a disaster. For section 139 to apply, the disaster must be a qualified federal disaster, and the payments must be qualified disaster relief payments. The IRS interpreted COVID-19 as a federal disaster, therefore payments for relief from this disaster are qualified under section 139 if: (a) the payments are made to reimburse reasonable and necessary personal, family, living, or funeral expenses incurred as a result of the COVID-19 disaster; and (b) the expenses are not compensated by insurance or otherwise (qualified expenses). Employees are not required to substantiate expenses with receipts, credit card statements, etc. However, for employers, it is key to document the terms of any qualified disaster relief payments that are intended to reimburse employees for qualified expenses. Now that tax filing season is here, it is important to look at any potential tax savings you may be eligible for. There are many COVID-19 deductions and tax credits to keep track of, so be sure to consult with a tax professional if you need help understanding which ones you may be eligible for given your specific tax 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 blog and a comprehensive freelance tax guide. Please note, due to the high volume of inquiries in regard to COVID-19, Jonathan is not able to respond to individual requests for information at this time. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/22/9-covid-related-deductions-and-credits-that-could-lower-your-freelance-taxes/
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If you’ve spent the pandemic working from home in an expensive metropolis surrounded by roommates and street noise, you may have started to wonder why you’re still paying sky-high rent in a slowed-down city when you could be paying off a mortgage in, say, Tulsa. Maybe you’re not ready to pack up and move, but you would like to spend some time in Hawaii this winter (of course you would). If you’re thinking of joining the more than 15 million Americans who have relocated since the start of the pandemic, there are a few spots with moving incentives that you should know about. In exchange for joining the community — and the tax base — these places offer self-employed newcomers generous perks such as large cash bonuses, help with student loans, free airfare, and even a mountain bike. Of course, if you are planning to relocate, it's crucial that you do so safely, by driving to your new home when possible or quarantining for a strict two weeks before you get on a plane, and quarantining again after you arrive. 1. Northwest ArkansasIf a slower pace of life near some world-renowned natural beauty sounds appealing, a move to Northwest Arkansas in the heart of the Ozark Mountains may be right for you. The region is offering a $10,000 bonus through its Life Works Here initiative to lure in qualified workers, as well as a mountain or street bike to explore the hundreds of miles of trails that have made the area a mecca for outdoorsy types. If selected, you’ll get 25 percent of the bonus upfront to help with moving expenses, and a $500-per-month stipend after that. Once you complete 12 months as a resident of either Washington or Benton counties, you’ll get the remaining $1,500 in a lump sum. To qualify, you must be at least 24, have two years of work experience, and be able to move to Northwest Arkansas within six months of being accepted. Like other remote worker programs, you’ll either need a full-time job that you can do remotely for an employer outside of Arkansas or a steady stream of freelance work. The program is a pilot, with a limited but undisclosed number of available spots. The application window is open now, but it’s not clear how long that will be the case, so apply soon if you’re interested. You can learn more here. 2. Tulsa, OklahomaAre you a fan of art deco buildings and spicy salsas? If so, you may want to apply for the Tulsa Remote program, which offers qualified freelancers a $10,000 bonus to move to the city known for its architecture, Mexican food, and occasional tornadoes. Like Arkansas’ program, you’ll get the money in installments, with a lump sum upfront to help with moving expenses followed by a monthly stipend, and then a final payment after you’ve completed your first year as a Tulsa resident. Participants also get a desk at 36 Degrees North, a downtown coworking space that offers its members mentorship through a network of business advisors, as well as the chance to rub elbows with other remote workers (when rubbing elbows is safe again). If you’re thinking about putting down some roots, Tulsa is an exceedingly affordable place to do so, with a median home cost of just $118,700 — about half the national average. For renters, the average monthly rent for a one-bedroom apartment in the city is just $669. To qualify for Tulsa Remote, you need to be eligible to work in the United States, currently living outside of Oklahoma, and able to relocate to Tulsa within the 2021 calendar year. You must either work full-time for an employer outside of Oklahoma and be eligible to do your job remotely, or have stable income from self-employment. To learn more, visit here. 3. MaineIf you’re a recent graduate and open to moving to Maine, you may be eligible for help with your student loans thanks to the state’s Educational Opportunity Tax Credit. The program started in 2008 to incentivize recent graduates of Maine universities to stick around after completing school by offering them a tax credit for their student loan payments, provided they didn’t move out of state. The program has since opened up to graduates of any U.S. college, as long as they earned their degrees after 2016. If you qualify for the program, you can deduct your student loan payments from your state income taxes. For instance, if you owe $5,000 in taxes and you paid $4,000 in student loans, you’ll owe just $1,000 in taxes. If your degree is in a STEM field, you can get a check from the state if your total student loan payments exceed what you owe in taxes. As for the quality of life in Maine, you can expect an abundant supply of lobster, scenic hiking spots, and a cost of living that falls slightly below the national average. In fact, a 2017 Thrillist article ranked Maine as the second-best state to call home, second only to Michigan. 4. HawaiiThe Aloha state is piloting a remote worker program with more modest incentives, but working from Hawaii could be considered an incentive of its own. If you’re not interested in a full-blown move and would rather freelance from a temporary, tropical home-base, Hawaii’s “Movers & Shakas” program may be right for you. If you agree to stay for at least 30 consecutive days on the island of Oahu, injecting the local economy with some of your freelancer income, the state will pay for your airfare. You’ll also have access to long-term hotel discounts to make your work-cation more affordable. So, what’s the catch? You’ll need to spend part of your time on the island volunteering for a local nonprofit, like Hawaii Literacy or Girl Scouts of Hawaii. You’ll also have to take a COVID test before boarding the plane, or submit to a 10-day quarantine after you arrive. The first cohort of Movers & Shakas has already been selected, but the program’s site says they expect to begin accepting new applications in early 2021. For more information, visit here. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/19/4-places-that-will-pay-you-to-freelance/
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The world is constantly changing. In the freelance economy, one of the most important skills moving into the future will be the ability to accept and capitalize on these changes. Key Shifts in FreelancingHow has the freelancing industry changed in the past few years? Well, the most noticeable change is the regularity of freelance work. The past year was challenging as the global pandemic forced workplace models to transform nearly overnight. We had to ask ourselves questions that we may have never considered in the past, like: ● What should stay open? ● Is it safe for me to go out into the world to work? ● Is this something that I can do remotely? This line of thinking has led many people to wonder if a freelance job is worth trying out. After all, the vast majority of freelance work is remote. Over the past year alone, the number of people who have tried freelancing in the United States has grown from 53 to 57 million, accounting for nearly one-third of the entire United States workforce and contributing close to $1.2 billion to the economy. The best part? These freelancers can work from remote locations. According to the Upwork Freelance Forward Economics Report, over 75% of new freelancers report they completed at least some of their work remotely, while over 30% completed all of their work remotely. How Can Freelancers Capitalize?So how does this affect you? How can freelancers make the most of the shifts happening in the industry? First, master your skill set. Whether you are new to your field or looking for a change in your career, it would be ideal for you to sharpen your skills and become one of the top consultants in your field of expertise. Freelancers performing skilled services make a median of $28 an hour. To put that in perspective, this is a greater wage than 70% of the U.S. workforce. So, how can you capitalize on the new freelance economy once you master your specialized skills? While there are many things that you can do to build your freelancing empire, here are five proven ways to land new clients as a freelancer in your industry. 1. CreateIt may sound silly to create content without a big audience to publish to, but ground zero is all about creation. If you are a writer, write. Do guest posts on established blogs in your industry — anything to get your work out there where people can see it. Logo designer? Create samples to build out your portfolio (even if you don't have a client yet). The same applies to each industry: create content that shows off your specialized skill. Flaunt your work. There are many content creation tools that can help you make this process more streamlined. The more eyes that see your unique content, the better off your business is going to be. 2. Leverage Word-of-Mouth MarketingWe can never underestimate the power of word-of-mouth marketing. While it is difficult to scale, this form of advertising is one of the highest converting. When you get a new client, go the extra mile and overdeliver — not only in your work, but in your manner, your professionalism, every aspect of dealing with them. Give each new client the best customer experience possible. Once you do this, don't be afraid to ask for referrals. People are much more likely to listen to suggestions that come from a friend or a trusted source. In fact, 92 percent of consumers say they trust a referral over any advertising, and 88 percent trust online reviews as much as personal contacts. That said, word of mouth is an invaluable way to gain new clients. You can automate the request for new referrals by building a list (of your new customers) and using email automation to create a campaign that automatically encourages new subscribers to refer your services when they share your link. 3. Build a Dynamite PortfolioHaving a strong portfolio is a must. The only difficulty is that it requires time to build with your experience. As you gain clients and win more work, you’ll become more attractive to prospective clients. Speed up your growth by promoting your portfolio. Market it as you market yourself. There are portfolio sites that allow people to search for you directly, such as: ● Journo Portfolio (for writers) ● Behance (for designers) ● Portfolio Box (for photographers) Find the best platform to showcase your work! Update your portfolio regularly to include your latest projects. Your newest stuff is likely to be your best stuff, and you want that to be on display. 4. Maximize Social PlatformsSocial media is not just for keeping up with friends and family. When properly positioned, a social media platform can be the only source you need for consistent client flow. Here's how to do it the right way: 1.) Create an account dedicated to showcasing your craft. 2.) Regularly post content focused on helping people achieve goals related to your service/offer. 3.) Build genuine connections and take the next steps through 1-on-1 conversations with people who are interested in your offer. 5. Network ProductivelyLast but not least is networking. Many people get nervous when you say the word, but in reality, effective networking is much less painful than people think. Similar to word of mouth, people respond best when there is a human element. The key difference here is that you are selling yourself rather than someone else doing it for you. Networking can be ineffective and cheesy if you focus on what you can gain. Build a list of people who can benefit from your services and focus on helping them. When you shift the focus to what you can give, your ability to make genuine connections increases astronomically. The fact of the matter is knowing the right people and making the right impression on them can be the difference between a long and difficult road or a faster journey to the peak of your industry. Join groups on social platforms, go to in-person meetups and connect on virtual hangouts; insert yourself into the conversation and allow your expertise to show. Find people who have a need that you can fill and help them. We are living in ever-changing times, and people who evolve through the changes will win. Capitalizing and creating a brand that outlasts your competition will be possible if you apply these recommendations. Freelancers will lead the change into the new economy and you can be at the forefront of innovation. You can live your dream, working from a remote location and making a significant income. All it takes is the will and skill or two you can leverage. So, you tell me: What’s your next move? via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/18/5-ways-to-land-new-clients-right-now/
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As part of the Biden administration’s response to the COVID-19 pandemic, the federal government has reopened the health insurance marketplace. By extending the health insurance enrollment period, they are hoping to encourage more people to purchase life-saving health coverage as we continue to face a public health crisis. The federal marketplace will be open from February 15-May 15, 2021. Most states use the federal marketplace to manage the insurance process, while some run their own insurance marketplace. All state-run markets have also reopened, and most are matching the federal deadline of May 15. States that do not match the federal deadline are: Connecticut: Open through March 15 D.C.: Open until the end of the pandemic Idaho: Open March 1-March 31 Massachusetts: Open through May 23 Minnesota: Open through May 17 New York: Open through March 31 Vermont: Open through May 14 An estimated 31 million people were uninsured at the end of 2020, up 10% from the previous year. It's a hard fact that the biggest barrier for individuals to buy their own health insurance under the marketplace system is the cost. All people whose income falls below 400% of the federal poverty level ($51,040 for an individual; $104,800 for a family of four) qualify for a tax credit to reduce the cost of their monthly premium payments. For individuals under 30, a low-cost “catastrophic” plan is available with much lower premiums, but higher costs for care. In New York, low- or no-cost Essential plans are a great option for those whose income falls just above the Medicaid threshold ($17,237-$24,980). If you are able, it is crucial that you secure health insurance coverage as soon as possible. Shop hand-picked plans on our national benefits platform; when you purchase coverage through Freelancers Union, we receive a small fee that helps us do our work all year round, at no extra cost to you. Health care for you, advocacy for all freelancers. That’s a win-win. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/17/youve-still-got-time-to-get-health-insurance-for-2021/
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Even more than most years, 2020 was tough for media workers. Newsrooms cut some 16,000 jobs, and many of us went from working full-time to striking it out on our own. Among other changes, working independently means a drastically different tax situation than a full-time employee faces. I’ve found myself confused about this world and spent much of 2020 pushing off thinking about it, reminding myself I’d figure it out by April. Eventually, I decided to consult an expert about the tax dynamics facing freelancers in 2021. That expert is Greg Geisler, a clinical professor at Indiana University’s Kelley School of Business. Dr. Geisler, a CPA who teaches courses on tax and financial planning, let me pepper him with questions about confronting tax season as an independent worker. Our conversation below is lightly edited for length and clarity. I see a lot of tax advice online for people who are “freelance” or “self-employed.” The terms are often used interchangeably. Is there any difference for tax purposes? The terms “freelance,” “gig worker,” “self-employed,” “independent contractor” — they all mean the exact same thing. You’re either an employee or you’re not. If you’re an employee, your employer withholds federal income tax, state income tax, local income tax if you have it. Your employer also withholds Medicare tax and Social Security tax. You get a W-2 form that outlines all these different taxes at the end of the year. It’s all very simple and very easy. But if you’re any of the other terms we just talked about, you are — under the tax law — self-employed, and you have to file what’s called a Schedule C, which is called the sole proprietor’s form. Basically, you’re your own business, and there are advantages and disadvantages to being your own business. The major advantage is that you can deduct any business-related expenses that the tax law allows. The disadvantage is you have to pay all of the Medicare and Social Security tax — both the employer side and the employee side. You never realized it when you were an employee, but the amount taken out of your paycheck, the employer had to double that. So when you’re self-employed, you pay both sides of that. They don’t call it Medicare and Social Security taxes. They call it “self-employment tax,” but that’s exactly what it is. You’re on the hook for all of that when you’re self-employed, and that’s what surprises many people who are self-employed. They think, “Oh, if I do something and get a thousand dollars, I’ve got a thousand dollars minus income taxes I have to pay.” That’s only partly correct. You’ve got to also subtract all the self-employment tax you have to pay, and the rate on that for most people is 15.3 percent, so that’s a lot of tax. The other surprise for me has been about when I pay my taxes as a freelancer. Of course, Tax Day is April 15, but there’s no withholding throughout the year on a lot of my income as a freelancer. I had previously thought I’d just pay all that tax on April 15, but my accountant tells me that’s not the case. Can you explain how this timeline works? You have to be attentive to self-employment tax throughout the year, and the way to do that is to make four estimated tax payments. It’s Form 1040-ES. “E” is short for estimated tax payments, and the due dates are April 15, June 15, September 15, and then January 15 of the next year. You’re supposed to pay one quarter of the total tax at a time, which is both self-employment tax and federal income tax, by each of those dates. And then you do the final accounting of what you owe by April 15, and pay the balance if it's more than you had estimated (or get a refund if you overestimated!). We have a “pay as you go” system. We don’t have a “wait until April 15 next year and pay everything you owe” system. These estimated tax payments are how as you pay as you go. Let’s say I lost my full-time media job last year, was slow to get my life together, and did occasional freelance work over the summer but didn’t know to pay estimated tax. Is the IRS coming to break down my door? You’re not in that much trouble. They will, however, send you a bill after you file your taxes, saying, “You should have paid this much.” Now, let’s go through the specific scenario you just gave. You were self-employed the whole year, and you did not know about the estimated tax payments. You will owe a relatively small underpayment penalty because you didn’t pay as you go like you were supposed to. They will just send you a bill in the mail after you file your taxes for 2020. You could figure out that underpayment penalty amount and add it to the amount you pay in taxes all at once, but most people just let the IRS bill them. What does sound fun to me, as a freelancer, is writing off expenses related to work. My understanding is I can be very aggressive about write-offs. Is that correct? That is correct. You deduct an expense so it reduces your income — it’s your net profit for the year that’s subject to both income tax and self-employment tax. What’s the threshold at which something is a business expense? Do I have to use it X percent of the time for work? That would apply to something like a computer. If you used it exclusively for work, you could deduct 100 percent of the cost. If you game on it half the time and use it for work half the time, then your deduction would be 50%. On the Schedule C, you list all your self-employment income and then subtract your allowable deductions to get your net profit for the year. That’s exactly where you’d do it: on the Schedule C. Can I deduct union dues? If you pay dues, you are usually an employee. Employees cannot deduct any of their business expenses under current tax law. They used to be able to, but they have not been able to since 2018, so that goes back to the big advantage of being a sole proprietor / freelancer / gig worker. You can deduct your business-related expenses. So if I’m not employed but pay dues into a union, I can deduct those. Yes. To the extent the union dues were related to your self-employment, you can deduct them on your Schedule C. The union dues back when you were an employee, you cannot deduct. What about my health insurance premiums? Are they deductible? You do not deduct your health insurance that you pay out of your own pocket on your Schedule C, sole proprietor tax return. But since you’re the owner of the business, you can deduct those from your total income, so those do end up reducing your income that is subject to income tax. It does not reduce how much is subject to self-employment tax (that 15.3 percent tax that goes into Medicare and Social Security) on your business tax return, which in the case of a freelancer would be the Schedule C. Does that extend to anything I might pay out of pocket for healthcare, like a copay? These are deductible as itemized deductions. That’s a separate category of deductions, and 95 percent of U.S. taxpayers don't have any tax deductions for their copays and deductibles if they’re self-employed. Because most of us take the standard deduction ($12,400 for a single filer in 2020). Exactly. On any of these expenses, what happens if I didn’t rigorously keep all my receipts? Am I out of luck? Quite simply, you want to go back and do your best to reconstruct them and take any deductions you’re entitled to. But if the IRS ever audited and asked for those receipts and you did not have any, you would lose the deduction, and you would have to pay more tax plus penalty and interest. So the takeaway is: Once you’re not an employee, keep all of your receipts for business-related expenses. Could I find the prices from a store where I made a purchase, cross-reference that with my credit card statement, and determine an expense that way? You’re right. Each year, you would do your very best to construct your actual business-related expenditures and include that in your tax file, whether that be a paper file folder or electronically. Yes, calculate all of your expenditures that are allowable as deductions for your business. I had income from eight or nine sources last year. How do I inform the government and make sure they’re all properly accounted for, other than adding up the money myself? That is very common in this new economy we’re in. For most of the organizations you have done work for, if you were paid more than $600, they’re supposed to inform you of the annual amount by sending you a Form 1099-NEC and send a copy to the federal government. So when the IRS gets your tax return, they will have already added up all of the Form 1099s that they have with your Social Security number on them. And if you don’t report at least that much income on your Schedule C of your Form 1040, they’ll send you a letter saying, “Why didn’t you report what appears to be all of your income?” Do I also need to submit a copy of that 1099? You’re good simply saying what you made, period. You do not have to include all of your 1099s from your non-employee compensation along with your tax return. You just have to be sure your accounting matches what those employers reported to the IRS. The thing that kicked off my weird tax year is that I lost my job and then got a union-negotiated severance payment. Some colleagues of mine are under the impression that severance is taxed differently than other income. I have not found anything that substantiates this notion. Can you clear up for me how severance is taxed? The reason you did not find anything is because you are right: Severance is not treated any differently than any other income. It’s all regular, or as the lax law calls it, “ordinary income.” A few colleagues of mine have created one-person LLCs through which they handle their business income. What is the practical benefit of that for a freelancer, other than perhaps creating a shield from liability? Generally, there’s no tax benefit. It’s for legal liability purposes that you incorporate under state law or set up an LLC under state law. You report all of your income and all of your allowable business expenses whether you’re a sole proprietor and don’t formally organize under state law, or you do – as an LLC or a corporation. What is the biggest tax mistake you see people in this bucket – freelance, self-employed, sole proprietor – make? And how do you recommend not making it? You want to deduct business use of your automobile. So, you want to use an app that keeps track of every time you have business use of your automobile. And then, generally, you’ll save the most tax if you just take the standard mileage deduction, which varies every year but is approximately 57 or 58 cents per business-related mile. So if you’re going to the grocery store, that’s personal use. You cannot deduct that. If you have an office and you drive to the office and back, you cannot deduct that. But if you’re doing any use of your automobile related to writing articles or driving to meet a client or whatever the self-employed person does, that is deductible. What if I drive to the grocery store, and on my way back, I stop for a business meeting? The drive from the grocery store to the business meeting is deductible. The drive from where you live to the grocery store is not deductible. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/16/everything-you-need-to-know-about-filing-freelance-taxes-for-the-first-time/
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In the worlds of journalism and content marketing, interviews are commonplace. Freelance writers, editors, content strategists, and more often work with sources to build out various types of storytelling, from audio to podcasts to longform writing and articles. Interviews and interviewees can provide expert feedback, thought leadership and personal narratives that can be applied to creating compelling content. While conducting interviews undoubtedly adds value to numerous forms of content by taking your storytelling to the next level, it can also lay the groundwork for lifelong relationships to blossom. People you interview can become go-to sources, refer your services and even turn into creative collaborators for future projects. In the case of journalism specifically, they might even think of you first for tips or breaking news. On top of providing important facts, data and opinion to back up your writing or content work, interviewees, even one-offs, all have potential to help develop your career. Therefore, it’s important to establish, nurture and grow those relationships with time. Here are five ways to build lifelong relationships with people you interview. Set a good example from the start First impressions are everything. They can make or break opinions in minutes. Therefore, it’s important to start a conversation on the right note. Show up on time for your interview. Rather than jumping into your questions, let the person you’re interviewing know what you’ll be discussing and how their responses will be used before you begin. Take a few moments to get to know the person you’re interviewing, too. Keep in mind these are real people, with real hesitations, and their level of comfort matters. While some people are pros at speaking to the media or in thought leadership contexts, others may be less experienced, or reluctant to open up. By establishing that line of trust at the beginning of an interview, not only will you receive better content for your storytelling, but you’ll create a strong foundation for a relationship to begin to grow. Leave time for questions It’s easy to end an interview after your own questions are answered. However, more often than not, people you interview may have questions of their own. Lend a voice to their side. At the end of an interview, ask your source if there is anything you didn’t cover that they feel is important for you to know for the story. This will help ensure their thoughts are heard and that they don’t leave the conversation wondering what’s next. In journalism, stories can be sensitive, and it’s essential for interviewees to feel that their experiences will be told correctly. In content marketing, brand image is everything, so you’ll want to make sure subject matter experts and thought leaders get a chance to fully flesh out the business or expertise they represent. In ghostwriting especially, it’s vital to make sure that all bases are covered so you can capture someone else’s voice. Don’t forget to say thank you One of the simplest (and often forgotten) ways to build good connections with people you interview is offering a simple thank you note. A quick email after an interview thanking people for the time they’ve spent talking to you can go a long way. It’s important to remember that while you also carve out time for interviews, sources in most case scenarios aren’t paid for their involvement and give up time from their personal lives to help you with your content. Be sure to reach out with links to the published work as well so sources know you value the effort they’ve put into being a part of the process. This also shows them that their time hasn’t just gone into the void. Fact-check everything Whether you’re being interviewed or the one conducting the interview, the last thing anyone wants is for a story to be told incorrectly. One of the quickest ways to burn a relationship with sources is to put out content that’s flat-out wrong. While errors do happen, many can be avoided simply by old fashioned fact-checking. Double check numbers, dates, name spelling and more with your sources. If there’s anything you’re unsure of, it’s better to err on the side of caution and confirm it before getting it live. While some publishers and businesses have copy editors who will do this work for you, others don’t, especially nowadays as budgets and staff are reduced. This is especially prevalent in journalism where newsrooms are often shrinking. Either way, double checking facts with your sources will help them trust you both now and in the long term. Keep an open line of communicationBy letting people you interview know that they’re welcome to reach out to you in the future, you establish a line of communication where more opportunities can develop. For example, you may want to interview someone again (or regularly) for similar content if they provide good material. Verbalize those thoughts and ask your sources if you can contact them for other projects down the line. Opening that door also helps people remember you for future opportunities. Some of the top freelance gigs come from recommendations, even from sources. This can help you land career-building jobs, meet new clients and form lasting connections in your industry. Networking is the heart of any successful business, including a freelance business, and interviews are one of the best ways to create and maintain relationships. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/12/build-lifelong-relationships-with-the-people-you-interview/
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On Saturday, Feb. 6, Freelancers Union President Rafael Espinal hosted a live conversation for Union members on the issues at stake for freelancers today. It’s been a long, hard road since COVID-19 shutdowns began in March of last year, and we’ve fought hard for freelancers who have been suffering, and continue to struggle, since then. With the installation of the Biden administration and the potential for an end to the pandemic on the horizon, we wanted to take this moment to check in with members and some key allies to share our priorities for the future. Joining the conversation were Freelancers Union Founder Sara Horowitz and Senate Majority Leader Chuck Schumer. Sara shared her motivation for starting Freelancers Union some 26 years ago, and talked about the need for mutual support groups like unions (like ours!), cooperatives, and neighborhood organizations to establish a lasting safety net that doesn’t rely on direct government assistance. Her new book, Mutualism: Building the Next Economy From the Ground Up, is available for pre-order now. Sen. Schumer then joined to share an update on the federal relief programs that he has worked to pass, including Save Our Stages funding for independent performance venues and agents, rent and mortgage assistance funding. Schumer has been a vocal advocate for independent workers and freelancers throughout the pandemic, and was instrumental in the CARES Act’s creation of a PUA benefit system and for freelancers’ continued inclusion in programs like FPUC and mixed earner payments. They’ve increased the number of weeks a worker can receive PUA benefits from 36 weeks to 50. And Sen. Schumer mentioned that one of his goals for the future is to make a PUA-type program permanent beyond the pandemic, ensuring that an unemployment safety net exists for freelancers and independent workers who are unable to find work for any reason. Based on the many conversations that we have had with members over the past months, these are our immediate priorities for the next actions from the federal government:
We are working toward these goals, but we are only as strong as our members! It’s your voice that helps us advocate for all freelancers, so get loud, reach out to your reps, and let them know that you are a member of the Freelancers Union community. Full video of the event is available on our YouTube channel. via Freelancers Union Blog https://blog.freelancersunion.org/2021/02/11/freelancers-in-2021-where-do-we-go-from-here/ |
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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