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Whether you’ve been freelancing your whole career or are new to the gig economy, maintaining affordable, quality health insurance is probably never far from your mind. Getting and keeping health insurance is easier for those who are part of an employer group. As an employee, your company usually pays for a portion of your premium, which gets automatically deducted from your paycheck. But when you’re an independent contractor or freelancer, you must purchase your plan and make all the monthly premium payments yourself and on time. And to make things harder, this past year has been a challenging business climate for so many. If you’re a freelancer who’s experienced a downturn in your income due to the ongoing COVID-19 pandemic, you may be finding it more difficult to afford health insurance. But now there’s some good news: The American Rescue Plan (ARP) is expanding access to affordable coverage and allowing higher tax credits for those paying for their own health insurance, including for higher-income individuals and families. The goal is to offer more individual market coverage options so that no one will have to pay more than 8.5% of their income toward health insurance. The tax credits will vary depending on your income and where you live. For example, an individual with income of $35,000 per year in New York City was previously eligible for a tax credit of $359 per month ($4,308 per year) but will now be eligible for $478 per month ($5,736 per year). The ARP is also providing COBRA relief in the form of 100% premium subsidies for eligible employees who have been terminated or furloughed. To learn more about the ARP and how it may help you, visit EmblemHealth’s new frequently asked ARP questions page. Also, you may be eligible for the EmblemHealth Essential Plan. This is a $0 plan for individuals with an income between $17,609-$25,520. See your Essential plan options on the Freelancers Union website. Due to the ongoing COVID-19 crisis, health insurance marketplaces are open through 2021, meaning all individuals can sign up for coverage at any time. To find a plan, visit Freelancers Union's National Benefits Platform. via Freelancers Union Blog https://blog.freelancersunion.org/2021/06/09/how-the-american-rescue-plan-made-health-insurance-more-affordable/
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Do you receive payments for your freelance business through peer-to-peer (P2P) payment apps such as Venmo, PayPal, Facebook, or other mobile platforms? If so, it’s important to know how income from these apps will impact your freelance taxes. In fact, because of the potential for these transactions to “fall through the cracks” of your regular freelance income reporting, it’s especially important to keep detailed records of them—because the IRS has already identified these platforms as a key area in which it is working to improve its tracking capabilities. In April, the IRS released an internal audit report on the capabilities it has to investigate fraudulent activity and non-reported income on these platforms. The recommendations from the report include increasing the agency’s ability to track activity and subsequently scrutinize the tax obligations of individuals utilizing these platforms. If you receive income on P2P networks, take note of these frequently asked questions: Which P2P platforms are safe to use for business transactions?Payment gateways like PayPal and Stripe were developed as online payment solutions for businesses. Facebook Marketplace and Venmo (which is owned by PayPal) are more suited toward individuals, although Venmo in particular has recently rolled out a business component to its solution. Are there minimum requirements for reporting income from these platforms?According to the IRS, the annual de minimis reporting thresholds are $20,000 and 200 transactions, which trigger the need to file an information return. However, starting in 2022, that threshold will drop to $600 with no transaction minimum, thanks to a provision in the American Rescue Plan Act. If you exceed the income or transaction thresholds, the P2P platform will send a Form 1099-K to you and the IRS for the appropriate tax year. However, even if you don't make enough to receive a 1099-K, you must still report any taxable income you receive through P2P platforms on your tax return. How do I report income received on P2P platforms?Remember, when using these apps, you are still obligated to treat them just as you would when you accept other forms of payment. This means you must report any income received on your tax return. Do my personal transactions have to be reported?If you use Venmo, for example, to receive payment from a friend for their share of a meal tab, you don't have to worry about reporting such payments on your tax return. However, the moment you begin accepting business payments on a P2P platform, you're responsible for reporting those earnings. How would the IRS know if I receive income on a P2P platform?As mentioned above, the IRS is currently working on processes and policies for more closely scrutinizing P2P payment platforms. In addition, the P2P networks themselves are required to provide information to the IRS about customers who receive payments for the sale of goods and services through those platforms. What is the best way to track business income through P2P platforms?As a freelancer, any income you receive for your business services must be reported and should be tracked on an ongoing basis using an accounting system. It is also advisable to have your income from these platforms directed to a separate business account so that it is not co-mingled with your personal funds. In addition, make sure to keep detailed records of your total income earned from all sources during the year for accurate tax reporting and estimated tax payments. You must substantiate your expenses. It’s important to keep detailed records of the costs related to your income, regardless of its source. This includes any payments made or received through P2P platforms, as well as other business expenses. Should I pay business expenses through P2P platforms?This is up to you, however, you must have a way of tracking your expenses in order to provide proper documentation, should the IRS decide to audit you. If you pay business expenses using Venmo, PayPal, or another P2P platform, you need to request an invoice from your vendor including the amount paid and a description of the business expense. P2P platforms represent another potential freelance tax audit risk – users beware!While using P2P platforms to receive and make payments is certainly convenient and legal, it’s vital that if you choose to do so, you are in compliance with all tax laws. Be certain to track all incoming payments so you can pay estimated taxes on them and report the income properly at the end of the tax year. Also, keep track of any expenses you pay for your freelance business on these networks so you can deduct them. As long as you treat P2P platforms just like any other source of income and expenses, there is much less chance that you will be audited by the IRS or receive an unexpected tax bill. 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. via Freelancers Union Blog https://blog.freelancersunion.org/2021/06/08/how-freelance-taxes-work-with-peer-to-peer-payment-services/
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Freelancing affords a level of control over your work schedule and the types of projects you want to prioritize more than traditional forms of employment. But for Black women thriving in the gig economy, it can often feel like an uphill battle. In addition to the financial uncertainty that freelancers face, Black women specifically are subjected to lower pay and forced to relive the racial trauma that affects them daily by being commissioned for projects centered on the “Black experience.” Freelancers are protected from discrimination by law, but this does not change the fact that prejudice, sexism, and racism are still rampant across many industries. Let’s explore some issues Black women freelancers face and focus on actionable steps to help protect one’s mental health in a competitive gig economy. Issues affecting Black women freelancersBeing Black and being a woman are unique perspectives, and individuals that identify as such can sometimes feel they are being targeted as spokespersons for these demographics. While it is important to raise up Black voices and encourage diversity to overcome disparities in many industries, no Black woman should feel like she is being valued only for this perspective. Many times, Black women are not able to write or design within their areas of expertise because clients seek out Black freelancers for specific pieces centered around Blackness or diversity alone. There are many issues involving racism and subconscious bias that prevent Black women from securing gigs in niche fields, and this can be a significant source of professional and personal stress. What’s more, Black women are often compensated less than men and white individuals, and this is not limited to the freelancing industry. Even Black women with advanced degrees earn less than white men with less education and experience. This pay gap especially affects those who work in creative industries, and Black artists sometimes have their work stolen by companies without being compensated properly, if at all. Clinical psychologist Dr. Monica Williams is an expert in race-based trauma who works with people of color in many industries, including freelancing and journalism. According to Williams, “All Black Americans suffer from some degree of PTSD.” Being repeatedly exposed to traumatic racial injustices through media outlets and in everyday life is oppressive, and it’s often compounded by experiences of racism in the workplace. Additionally, the discrimination that Black women face on online freelancing platforms makes getting gigs difficult. Freelancing Black women make less money than other freelancers and are often commissioned to cover topics that are deeply racialized and traumatic. Black women deserve to be recognized as whole individuals with experiences and expertise to offer in fields outside of race issues. While diversity, equity, and inclusivity (DEI) is becoming a top priority for many major companies, there is still a lot of work that needs to be done. It is widely recognized that diversity is critical in any workplace, not simply for employee mental health, but also for the way it boosts company performance. But that doesn’t mean every company is putting their money where their mouth is. Steps to protect your mental healthWhen considering all the potential liabilities that come with freelancing, rarely does mental health come up. In addition to concerns such as protecting yourself from cybersecurity issues (which have become an increasing threat for remote workers especially since the pandemic hit) and focusing on gaining and keeping clients, you should also be taking time to address mental wellness. As a Black woman working in the gig economy, it is imperative to consider mental health a priority. Not only is practicing self-care good for your general wellbeing, it's also a self-sustaining act of resistance in those moments when you feel like things are stacked against you. There are a number of focus points for keeping yourself mentally healthy while working as a freelancer. 1. Find your peopleTake time away from the emotional labor of helping white people understand the Black perspective and connect with a group of like-minded freelancers and entrepreneurs. Save your energy and seek support from those who have first-hand experience with similar personal and professional struggles. This is also a great way to network and invest in your professional growth. 2. Practice mindfulnessMake time in your schedule to check in with yourself and practice mindfulness. Mindfulness meditation has been proven to increase productivity as well as ease psychological stresses such as anxiety, depression, and even chronic pain. Anxiety is common, especially for young professionals, and the first step to handling your stress is recognizing it. Spend some time with yourself each day to focus and recenter to avoid getting caught up in life’s stressors. If you think you need additional help, be open to seeking mental health services. 3. Take tech breaksSet aside time each day when you will limit your exposure to media dealing with racism. It’s important to stay on top of current events, but constantly inundating yourself with news and social media can have adverse impacts on mental wellness. This is even more critical during the pandemic, when many people are still working from home and surrounded by nothing but technology all day. Be sure to take occasional breaks from screens and social media, and give yourself a reprieve. Go for a walk, spend time with friends or family, and don’t look at your notifications for a few hours. 4. Get adequate sleepAs freelancers, we often work late into the night and push through the weekends to stay on top of deadlines. It can be hard to put the laptop and phone away, turn off your notifications, and get restful sleep when there are so many things distracting you. Prioritize rest, and stick to a sleep schedule. Practicing breathing exercises can help reduce stress by lowering the blood pressure and increasing your ability to focus on rest. Try to stick to a consistent bedtime and wake up time, making adjustments and exceptions only when it's absolutely necessary. 5. Manage your financesKnow your worth, and get paid for the work you do. Don’t be afraid to raise your freelance rates and only take jobs from clients that value your time and energy. Ask for compensation when emotional labor is an aspect of your assignments. Make it known what your specialties are, and don’t settle for only being funneled pieces that pertain to your Blackness or your identity as a woman. Also, take time to organize your finances and budget appropriately. Just because you are a freelancer doesn’t mean you shouldn’t be planning for your financial future, including debt management and retirement planning. Being financially well-situated will be a significant stress reducer, which will boost your mood and increase your confidence. ConclusionThe experiences and expertise of Black women are diverse, and as freelancers, Black women have to keep reminding the world that they are more than just Black or female. This can be professionally challenging, as well as emotionally and physically draining, and it often takes an extra toll on mental health. via Freelancers Union Blog https://blog.freelancersunion.org/2021/06/07/5-ways-black-female-freelancers-can-protect-their-mental-health/
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For most of us freelancers and solopreneurs, there is an innate drive to create something that is uniquely yours, purely driven by your own efforts and abilities. For me, it was also about taking control of my time, work, and life. When you’re completely driven by building your own thing and making money on your own terms, you have no choice but to make it work. And most small-business owners are making it work alone. The US Small Business Administration says that 81% of small businesses have no employees. 81% of small businesses are solopreneurs. Entrepreneurs are a small minority when compared to traditional workers, and most of them are doing what they do alone. Loneliness is a big issue for entrepreneurs in general. The Harvard Business Review reports that “half of CEOs report experiencing feelings of loneliness in their role.” And entrepreneurs combine this loneliness with higher levels of stress and worry when compared to other workers, according to a Gallup poll. Solopreneurs are dealing with these struggles completely alone because they don’t have the same work relationships other entrepreneurs have, and their normal support systems (friends, family, etc.) have no idea what they’re going through. Now, I’ve painted a pretty bleak picture of solopreneurship. The thing is, it isn’t all loneliness, stress, and worry. I LOVE what I do and would never have it any other way. And I’m not alone. Working for yourself can give you a sense of fulfillment that nothing else can. The same Gallup poll cited above also found that entrepreneurs are more likely than other workers to report “learning or doing something interesting” and “experiencing enjoyment.” In order to thrive, solopreneurs need to intentionally seek out and cultivate meaningful professional connections for two reasons: 1. It makes work more fulfilling to have someone you can talk to who “gets it.” We’ve all had the “work spouse” who becomes your closest friend and confidant not just because they’re awesome, but also because they know what you do with the majority of your day — they can speak the same work lingo and understand your joys, concerns, and frustrations on a level that the other people in your life don’t. Research bears this out as well, as “70 percent of employees say friends at work is the most crucial element to a happy working life.” 2. It makes you better at what you do. Solopreneurs don’t have a manager who helps them set goals, incorporate feedback, and generally get better at what they do. Most solopreneurs are incredibly self-driven and do a lot of these things on their own, but it can still be helpful to have an outside peer or mentor who understands what you do and can give you an outside perspective on your work. So, meaningful connections are important, but how do you cultivate them when you’re a one-person show? Before I tell you how to create meaningful connections as a solopreneur, let’s define “meaningful connection.” A meaningful connection is a relationship with someone who understands what you do, whose success you genuinely care about (and vice versa), and who has something to offer in terms of experience/expertise. A meaningful connection is not a relationship you are using to find clients, get work, or make a connection with someone else (AKA someone with a higher status, bigger following, etc.). Is this sometimes a happy byproduct? Yes. But it can’t be your primary motivation. OK, now that we’re clear on that, here are a few ways to do make them: Networking, but not the terrible kindI never burn a bridge. Since starting my business, I have reconnected with so many people including former colleagues, business partners, and friends who I haven’t seen for years. I HATE actual networking, which I define as talking to strangers at professional events in an effort to gain something. What I do is reconnect with people I actually like, know, and respect in an effort to make myself better at what I do (and hopefully add value for them as well). Although it took a couple of follow-up emails for some people, I didn’t find anyone who wasn’t willing to connect and everyone I talked to gave the most amazing advice and support. Did some of these connections lead to work? Of course. Several of these amazing people have referred me to clients, brought me in on their projects, and even passed on entire projects to me. Make sure to cultivate your relationships and keep up with your network. You never know when you may need to reach out for advice, a recommendation, or an introduction. Likewise, I never turn down a request for a chat with anyone I know who reaches out to me in an effort to pay it forward. Social media (I know…bear with me)I hate social media, but it is a necessary evil for a lot of businesses these days. For a long time, I did not have a social media presence for my business and tried to stay away from it as much as possible. As I’ve built my content business over the last year that has shifted. And while there’s definitely a lot of nonsense, I’ve made some real, meaningful connections in a couple of ways. I belong to a few Facebook groups specifically for different types of entrepreneurs (women, location-specific, niche-specific, etc.). With a few exceptions, I’ve found the people in these groups to be incredibly kind, welcoming, and supportive of each other. I’ve also found a few people through Instagram DMs that have turned out to be incredibly aligned with not only the work I do but the reasons I do it. Luck? Perhaps. But it can’t hurt to try. Memberships and communitiesThis has become incredibly popular over the last several years. It seems like everyone and their mom is creating a membership group (including me…). I’ve been a part of several of these groups recently based on things I was trying to learn or new features I was trying to incorporate into my business. In every case, I was so surprised by the level of kindness and support that I witnessed from the facilitators and members of these groups. These were especially powerful because everyone was working toward a similar end goal. Create or join a mastermindThe concept of a “Mastermind” was originally created by Napoleon Hill in 1936. “The Master Mind principle: Two or more people actively engaged in the pursuit of a definite purpose with a positive mental attitude, constitute an unbeatable force.” Today the concept has been popularized by many business gurus. You can join a mastermind of like-minded people or use any of the strategies above to recruit your own members and create one. The group meets regularly to discuss goals and workshop issues together. Solopreneurs need to intentionally create connections and combat loneliness so that they can keep building, creating, and doing what they love. Because it’s not just about someone to commiserate with about your crazy client or failed funnel, it is also about having people who can truly celebrate when you land that big contract or conquer your fear of public speaking. Together we can do more than we can alone. via Freelancers Union Blog https://blog.freelancersunion.org/2021/06/03/how-to-battle-solopreneur-loneliness/
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The Paycheck Protection Program (PPP) has been a lifeline for many freelancers and small businesses who experienced a loss of revenue due to the COVID-19 pandemic. Over the past year, the program was expanded several times to allow more participants to take part in it and receive funding — the government even made the loans forgivable. This was, and still is, great news for cash-strapped freelance business owners. However, there were always at least two key caveats for those taking PPP loans: 1) the funds had to be used for qualified expenses (see the list below) and 2) as a recipient, it is your responsibility to ask your lender for forgiveness within 10 months after the end of your covered period (24 weeks for most loan recipients). This 10-month window is closing rapidly for some freelancers, especially if you received first-round funding. Most banks are now accepting applications for PPP loan forgiveness so be sure to contact your lender. Otherwise, you will have to start repaying your PPP loan. You can find full details on loan forgiveness requirements on the Federal Register website. The following is a quick summary of what are considered Eligible Expenses for PPP Loan Requirements: The first PPP round loans included eligible expenses like utilities, rent, payroll, employer-sponsored health insurance, and other expenses, which are also covered in this second round. The second round of PPP funding also included four categories of additional covered expenses: 1. Operational expense such as cloud computing, HR, and accounting software. 2. Property damage costs for damages caused by public disturbances in 2020 that were not covered by your business insurance. 3. Supplier costs for payments made to suppliers before taking the PPP loan that were essential for keeping your business running. 4. Worker protection costs for PPE and other investments made to abide by local and federal COVID-19 business guidelines. PPP loan forgiveness amounts are not taxable on a federal level; check your state taxation rules. The PPP loan amount that you get forgiven 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. It’s imperative that if you received PPP funds for your freelance business, you must take action to request forgiveness from your lender within the 10-month window noted above and ensure that you have all of the required documentation to process the forgiveness application. Failure to do so means that you will be on the hook for repaying the loan and any accrued interest—a burden that no freelancer and business owner wants to bear, especially as we work to emerge from the COVID-19 pandemic period. 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/2021/06/02/request-ppp-forgiveness-before-its-too-late/ |
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
April 2023
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