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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. 2020 began with promises of a new, exciting decade to start the vibes off right – and we all know what happened next. With the hardships from the last 18 months, more and more people came to realize that their current job didn’t suit them and began leaving for greener pastures creating what analysts were calling the Summer of Quitting, with more than 3.9 million people quitting in April, 2021 alone. Many of those people quit to work as freelancers. With more financial freedom working for yourself, comes a lot of extra financial responsibility – from sorting out 1099 forms and paying quarterly taxes, to making sure you’re saving enough money for those slow seasons. A recent study conducted by OnePoll in collaboration with Lili finds that “1 in 3 freelancers spend at least 11 days a year just thinking about their finances.” That’s compared to 1 in 5 people with full-time jobs. This means that while full-timers and freelancers have similar concerns with money, freelancers are spending more time dealing with financial anxiety. When you’re juggling clients, bookkeeping, and deadlines, those 11 days a year should be for you, not stressing about your finances. While people are spending a great deal of time thinking about money, at the same time, the study also found that many Americans are mismanaging their cash. 35% admitted that while they do spend time making a budget each month, they struggle to stick to it. For many, freelancing is an amazing way to become financially independent, but one of the downsides can be inconsistent income. Some months there are peaks where you can barely keep up with all the clients interested in your work, other months are a bit slower. Saving for the slower months so you don’t fall behind is one way to ensure your freelancing hustle thrives no matter the circumstances, and with that – financial freedom. However, the study found that while 53% of people are worried about not having enough cash saved for an emergency, only 17% actually have an emergency fund. That means 83% of American freelancers aren’t prepared for a rainy day. Taxes can also be a blind spot for many freelancers. With a full-time gig, the IRS automatically takes taxes out of paychecks when a W2 is filed. However, with a 1099, it falls to independent contractors to put enough money aside each paycheck to pay Uncle Sam when the time comes. For those freelancers unfamiliar with federal and state tax percentages or what deductions can and can’t be claimed, this is easier said than done. In fact, 53% of people polled are unsure what deductions they can claim on their taxes, with 44% stressing about not claiming deductions properly. Those stats shed some light on why 2 in 5 respondents say they have extreme anxiety when doing their taxes. And in these already stressful times, who needs even more to stress about?! Managing your cash flow well is one of the most important aspects of a successful freelancer. So, if 1 in 3 Americans admit their finances are one of the least organized parts of their life, while at the same time millions are moving to freelancing each month – what can be done to ensure the success of each and every freelancer entering this new market? All the pain points we just mentioned are why Lili designed a bank account for freelancers, letting you manage everything all in one place. From allowing you to keep your personal and business transactions separate in the same account with automated expense reports every quarter to automatically setting aside a fixed percentage of your income for your taxes, or creating and managing your invoices directly from the app, a Lili account can save you dozens of hours and hundreds of dollars every year… and a lot of anxiety too! via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/28/freelance-financial-anxiety-costs-you-time-and-money/
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Have you ever felt like building a profitable and purposeful creative business is a lonely, uphill struggle? I know I have. I’ve also known the joy of feeling fully seen, heard, and supported by peers, professionals, and community members as I navigate uncharted (and often scary) professional and personal territory. We ALL need people who – unencumbered by the personal baggage and demons we carry – are able to see our vision and are willing to hold space for it when we inevitable falter. Here’s a beautiful example of someone holding the vision for me in the early days of my business: Justine, This is your best newsletter EVER. You are getting more and focused, more and more persuasive…and more and more powerful sounding. I feel that you’re on the verge of a breakthrough that’s going to power you into Brené Brown status and international recognition. It is absolutely thrilling watching this process. And when you need music for your video, Ted talk, and book tour, I’d love to help you!! I want to write you a theme song that captures your positivity and energy. I love that you are becoming the Super Creative standing atop a tall building with your cape rippling win the wind and want to capture that for you someday! Aly Palmer (musician) WOWZA! I printed it out and stuck in in the middle of my pinboard, where it still lives, all these years later. It’s the email I read when I’m doubting myself, feeling lost, or my imposter syndrome is kicking in. It’s one of the most generous, encouraging, and supportive things anyone has ever done for me. Here’s the takeaway, folks. You can’t be the visionary and the holder of that vision at the same time. You need other big-hearted, big thinking, action takers to help you articulate it, create space for it, and hold you accountable to doing whatever it takes to make progress towards it. If you didn’t know this is what you needed, but are totally on board, here are 4 ways to find your vision holders. 1) Be willing to SHARE your most audacious visionIf you’ve ever hidden your biggest dreams because you were worried about what friends/family/random strangers online would have to say about it, you’re not alone. If you’ve ever wondered how seemingly ordinary folks ignore the critics and achieve extraordinary things, I believe it’s because they’re willing to share their audacious visions in spite of the fact they may be ridiculed for them. If you need a bit of courage, here are a few folks who put their visions out into the world and stuck with them, despite the negative feedback and ridicule from others (including industry gate-keepers). Walt Disney was fired from the Kansas City Star in 1919 because his editor said he “lacked imagination and had no good ideas.” Lady Gaga, when finally signed to a major record label, was dropped after just 3 months Vincent Van Gogh sold only one painting during his lifetime (to a friend!). It was only after his death that his work received the acclaim it enjoys today. And the list goes on. The moral of this story is if you’re going to go big, you’re going to have to cultivate courage and tenacity Action step: The first step to building your vision is to articulate it. It may not be fully formed or clear yet, so use your creative skills to bring it to life. Draw it, write it, shape it. Just get those ideas out of your head and into the world. 2) Commit to consistent, imperfect actionOne of my favorite sayings is “you can’t steer a parked car,” so get moving. Maybe your commitment to action is writing 1,000 words a day. Or perhaps it’s doing and sharing one drawing a day for 100 days during which you’ll explore a theme or idea. Or perhaps it’s committing to learning and implementing the fundamentals of business so you can more successfully launch your service or product into the world. Whatever your vision, it’s not going to just materialize without consistent action. You’re going to have to be willing to do some pretty hard, exciting, leap-of-faith stuff to bring it into the world. Action steps:
3) Share your progressI was once told by a college professor that I was a bad writer. So, you can imagine how completely terrifying it was to publish my first blog post in 2008. But I made the commitment to post at least once a month and I’ve held fast to that commitment ever since. And guess what? I can now say I’m a writer and feel it to be true. Through repeated exposure to the thing that scared me, I discovered that not only did I have the potential to be a good writer, it’s actually the way in which I connect, form and test ideas, and share my value and expertise with the creative community at large. I can honestly say, if I hadn’t gotten over my fear of writing, I don’t think I’d have the business I have and love today. Action step: 4) Find the people who are doing great things and join themI talk about this a lot because it’s a game changer! One of the biggest, boldest, and best commitments I made (and continue to make) as a business owner is finding groups of people who are in a similar stage as me in their business or further along, and join them. The more seasoned I become, the higher level those folks become, and the more I have to invest to be in their company. And I’m good with it because when I invest to be in the right company, I grow in ways (and at speeds) I never could or would alone. Action step: Determine who your same-level, or a few steps further along, people are and where they’re hanging out. Beyond a certain point in your business evolution, expect that those places will no longer be free Facebook groups or spaces. Create a “business growth” line item in your budget and give it a number. Don’t put yourself in the poor house to do it, but make it an amount you need to think about. When we make a significant investment in ourselves, we’re more likely to show up for it and ourselves. Caveat: don’t compare your budget and investment to someone else’s and never let a coach or anyone else convince you that your ability to invest is in any way a reflection of your commitment level. The two are NOT the same and it’s a sleazy sales tactic. If you’re not ready now, that’s cool. Find the group you want to join, put the line item in your budget, and make it a goal you’re planning to reach in, say, 6–12 months. Review again then. Finding the people who will hold your vision, challenge you to do all the things you thought you couldn’t, and cheer you every step of the way is a game-changer. What’s ONE step you will take to find your people? via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/27/what-all-creative-freelancers-need-to-succeed/
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The following Career Dispatch was written by Jonah Feingold, who directed, wrote, and produced the IFC feature “Dating & New York.” It is reproduced with the permission of Backstage.com. To activate your 30-day free trial as a performer, or waive the typical casting fee as a creator, use the code FLUCAST19 at checkout here. And for free access to Backstage Crew, sign up here. I hope this article finds you well, as I sit in my Greenpoint, Brooklyn apartment five days away from the opening of our feature film, “Dating & New York.” I’m just so excited—and there are hints of fall in the air, too: pumpkin spiced lattes (never had one) and school supplies (don’t use paper anymore). Ever since high school, I’ve sent hundreds of cold emails to directors, writers, actors, producers, composers; bts photographers from “Pirates Of The Caribbean,” asking for a bit of their time to lend some advice to an aspiring filmmaker. I was obsessed with what people’s *processes* were. Specifically, how were directors communicating to actors? How did they block scenes? Literally, how did they send emails? Was it formal? Casual? Visual? Throughout the process—which is still ongoing—I learned that no two approaches are the same. In short, no one knows anything. That said, I wanted to make an ongoing diary entry, dedicated to filmmakers. A simple, brief, and practical guide to making an indie movie. Or, more specifically: A Brief and Practical Guide to Making an Indie Rom-Com in New York for 15 Days That Does Post Production During a Pandemic Then Plays at Tribeca and Gets Acquired By IFC:
READ: 11 Tribeca Filmmakers on How to Make Your First Movie
And to reiterate once more: There is no one way to do things and no one knows what they’re talking about. You got this! via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/23/a-step-by-step-guide-to-making-a-movie/
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The Social Security Administration has complex rules for Social Security Disability (SSD) recipients who return to work, particularly those who are self-employed. This guide summarizes some of the most important rules. Substantial Gainful ActivityThe SSA basically says that you are only eligible for SSD benefits if you cannot engage in Substantial Gainful Activity. The SSA says that employment income of $1,310 or more per month in 2021 is considered Substantial Gainful Activity (the figure can change annually: https://www.ssa.gov/oact/cola/sga.html). The basic rule of SSD benefits is that you should not receive SSD for any month that you are engaged in Substantial Gainful Activity. There are exceptions. Trial Work PeriodThe primary exception to the rule is what they call a Trial Work Period. If you receive SSD and earn $940 or more in a month in 2021 from employment income (the figure can change annually: https://www.ssa.gov/oact/cola/twp.html), the SSA will count that month towards a Trial Work Period. You will be allowed to keep your earnings (even if they are more than the Substantial Gainful Activity amount) and your full SSD award for 9 months in a 60-month period (the months do not need to be consecutive). Extended Period of EligibilityAfter you have earned over the Trial Work Period amount for 9 months, you will enter the Extended Period of Eligibility. During this 36-month “re-entitlement period”, you can be re-entitled to SSD benefits if your work activity falls below the Substantial Gainful Activity level. You are eligible for SSD benefits for the first month and the following two consecutive months during your Extended Period of Eligibility in which you work above the Substantial Gainful Activity amount ($1,310 in 2021, $2,190 if you are blind). After that, your SSD benefits will stop if you continue to earn above the SGA amount. Calculation of Self-Employment IncomeSelf-employment income from your own business can be difficult to calculate. The SSA will determine your “countable income” by looking at your salary and profits. They will consider the amount of money you put into your business. They will then deduct the following from your net earnings: the value of any significant amount of unpaid help given to you by other people, impairment-related work expenses, and business support paid by someone else. The resulting amount is your “countable income.” If you are still in the Trial Work Period and your countable income is more than $910 in a month, that month will count towards your Trial Work Period. If you are in your Extended Period of Eligibility and your countable income is more than $1,310 in a month, the SSA will consider it Substantial Gainful Activity and you will not be eligible for SSD benefits in that month. Report Your IncomeIt is extremely important that you report your income to the SSA on a monthly basis and keep track of your Trial Work Period months. Keep track of all documents you submit to the SSA, the dates you submitted or interacted with an agent, and the name of the agent. It often happens that someone completes the Trial Work Period, engages in Substantial Gainful Activity and is still paid SSD benefits. This will result in an overpayment and the SSA may not address it for many months. This means that they will collect the “overpaid” SSD benefits back from you. There are sometimes ways of avoiding repayment but it is often a very stressful and difficult process. MedicareEven if your SSD benefits are terminated because of the amount of your income, you will get at least 7 years and 9 months of continued Medicare coverage, as long as your disabling condition still meets the SSA rules. At the end of that period, you have the option of continuing Medicare Part A coverage by paying a premium. If you have Medicare Part B, you will just continue to pay the premium as you have in the past. *This guide is designed to provide background information about the areas of law discussed. Information in this guide about the law may not reflect the most recent updates and should be verified. The information provided in this blog post is not intended to and does not constitute legal advice. For legal advice about your specific situation, you should consult with a qualified attorney. via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/22/freelancing-and-disability-benefits/
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Some issues that freelancers face are universal — things like getting paid on time, navigating taxes and managing your career. Freelance writing comes with its own challenges, from copyright and contract considerations to libel and slander claims. That’s why our team at Dinghy, together with Freelancers Union, recently brought together a panel of industry leaders to offer freelance writers key advice for running their businesses. If you missed the event, don’t sweat. This blog is the third in a series recapping our panelists’ key insights. (Also check out our first post-event blog on rates and negotiating and our second on copyright protection.) Ryan Goldberg, Freelance Journalist and Organizing Committee Member of the Freelance Solidarity ProjectA freelance journalist since 2008, Ryan Goldberg has primarily served as an investigative reporter for print and digital outlets but has also written for TV, film and documentaries. Through his varied experience, he’s seen good freelance practices in place in other industries and is now working to improve practices within the media industry through the Freelance Solidarity Project. A division of the National Writers Union, the Freelance Solidarity Project was started by a group of digital media workers in spring 2018, and Ryan joined soon after. The founders were a part of the wave of unionization taking place in digital media newsrooms and felt strongly that freelancers shouldn’t be left out of the equation. “They recognized…that the media industry is incredibly volatile…and it’s also an industry that has been declining,” says Ryan. “It’s really important to band together and recognize the challenges we’re all facing.” One of the biggest challenges for freelance writers centers on contracts and terms of work. What a standard contract can and should look like for freelancers is an important piece missing for many people because freelancers are siloed. That’s why one of the Freelance Solidarity Project’s major initiatives is encouraging publications to use standard letters of agreement and publicize standards for freelancers. The Freelance Solidarity Project has a gold standard agreement, which several publications have already requested. Vital Contract ConsiderationsWhen negotiating their own agreements, Ryan advises freelance writers to pay particular attention to three key terms: indemnity, graduated payment and copyright. · Indemnity “Most contracts say that you will indemnify the publication, when of course it should be the other way around. Especially when it’s reporting that’s going to ruffle some feathers, it should be the publication that’s agreeing to indemnify you and pay your legal bills and support you under their liability insurance.” · Graduated Payment Don’t settle for only being paid when your story is published. “You could take an assignment and maybe it’s six months or a year before it comes out. And you won’t even get paid then. You will get paid 30 days or 60 days from when that story comes out. How can you do this as a career if that’s how long you need to wait to get paid for the work you do?” · Copyright “The third [consideration] is really around intellectual property and copyright — and making sure these agreements hand over the copyright to the contributor instead of [publications] keeping it for themselves.” Contract Red FlagsSimilarly, Ryan also warns about a few important red flags that freelance writers should be on the lookout for when reviewing agreements. · Work for Hire Seeing “work for hire” in a contract is the #1 red flag and is becoming more prevalent. It means that instead of you (the author) keeping the copyrights, the copyright and publishing rights will belong to the publication. “If you don’t own the right that you’re pitching to the publication…if they are holding your work forever, you may miss out on the opportunity to option your work for somethingelse, or even report about the same thing again. If you specialize in a certain subject area, to give that up would be madness.” · No Kill Fees A contract without language around kill fees is another red flag. With a kill fee in place, “if a publication decides not to publish your work after you’ve done the work, you will be paid a certain amount for the work you’ve already done.” Without a kill fee in place, you get paid nothing. Ryan shares that many publications do have good contract language but are hesitant to give it to you right way — so you need to ask for it. “It often may take just one simple question like, ‘Can you do better on this indemnification language?’ or ‘Can you do better on this copyright language?’ and they’ll say, ‘Oh yeah, we have another contract for that. We’ll send that one to you.’ It does help to know what you want to counter with. If you know it doesn’t look good, be able to say, ‘Can you do better or can you do this? Instead of work for hire, how about we do three-month first right exclusive window?’ In terms of indemnification language, do your due diligence to know what language you’d want to insert.” When it comes to indemnity and media liability, it’s just as important to have insurance to protect yourself as it is to ensure your contracts have the right language in place. This is especially true when the publisher is asking you to indemnify them. In this case, insurance is a must. Even when indemnification is held by the publisher and you have negotiated the “perfect” contract, you can still be subject to insurance claims. For instance, if you miss a deadline and end up delaying a launch, you could cause a financial loss to your publisher, who may file a claim against you. The good news is that freelance writer insurance — brought to you by Freelancers Union in partnership with Dinghy and NSM Insurance Group — provides the professional liability coverage you need, and it starts at less than $1/day. Learn more and get a free quote online in minutes. About Ryan Goldberg To hear more from Ryan and our other panelists — which include Wudan Yan, Independent Journalist and Co-founder of The Writers’ Co-op; Umair Kazi, Director of Advocacy and Policy at The Authors Guild; and Robert Hartley, Co-Founder of Dinghy, offering first-of-its-kind freelance writer insurance — view the recorded event. Plus, stay tuned for insights from our final panelist coming soon. via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/21/issues-facing-freelance-writers-in-2021-contract-standards/
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The world of freelancing means you are your own boss, you can work when you want, and you can pick and choose exactly what projects you want to work on. Whether you choose to supplement your 9-5 income or dive straight into being a full-time business owner, freelancing takes dedication, grit, and most of all, hard work. But freelancing isn’t all glamorous. As a freelancer, there is no steady paycheck, so you must be able to manage your finances and workload. You have to go out and find your own clients, or you risk not getting paid. Despite the drawbacks, many people still go on to be extremely successful freelancers. Whether you do freelance writing, photography, graphic design, or other work, there are plenty of ways to make money as a freelancer. Here are five tips to help you get your freelance business up and running. 1. Create a Business PlanEvery good business needs to start with a plan. Even if you are just in the very initial stages of brainstorming your business, a business plan can provide a wealth of assistance. There are hundreds of free business templates available for download online. You just have to find one that works for you. A business plan will encourage you to think about your business as a whole. You’ll determine your target audience, your business mission, your competition, and more. Don’t panic if you have never completed a business plan before. A freelance business plan can be as in-depth or as surface level as you would like. Although, it is always beneficial to go into more detail if you can. 2. Set Business GoalsWhat do you hope to achieve as a freelance business owner? What are your long-term goals? Quarterly goals? Monthly goals? Goal setting is imperative to operate a successful freelance business. Without defined goals, it is hard to push your business in the right direction. That’s mostly because you don’t necessarily have a clear focus of what that direction should be. Start by writing down all of your long-term goals. Consider your financial goals, customer service goals, and work-life balance goals. What do you really hope to gain by starting your own freelance business? Overwhelmed by your goals? Unsure of where to start? Instead of getting completely overwhelmed by your long-term goals, break them down into smaller objectives. What do you need to accomplish in one year to achieve all of your long-term goals? Break it down even further to figure out what you need to achieve each month and even each week. By setting small, actionable goals, you will find you can accomplish a lot more than you even realized, without getting stressed. 3. Perfect Your PitchNo matter what type of business you own, you must master your pitch. A pitch is a quick spiel you give clients about your business and the value you provide. What will you say to make clients want to work with you? Take time to really think about your business pitch. You will want to have a verbal elevator speech nailed down that you can deliver in less than one minute. You’ll also want to write a few brief, general pitches you can quickly email a potential client about your business. In your pitch, describe who you are, how you got started, and what your business does. Make it concise, fun, and most of all, totally like your personality. If you’re new to freelancing, pitching is a necessary step to find those ever-important first few clients. You need to be able to share what you do confidently, so take the time to master your pitch. 4. Control Your CostsAs a new entrepreneur, you likely will have some startup costs associated with your business. While it’s pretty near impossible to start a business without any money, you also don’t want to spend your life’s savings on it. If you are new to freelancing, create monthly income goals. While it’s great to push yourself and hope to earn a lot of money immediately, your income goals should also be realistic. What can you truly expect to earn each month? Set a budget according to the income you expect to earn. Be conservative with costs, especially at first. Consider what you need to outsource and what you could do yourself. Once you start earning more money, you can invest more back into your business. And don’t forget – if you are earning money as a 1099 contractor, taxes haven’t been taken out of your income when you receive it. It is your responsibility to make sure you pay quarterly taxes to the IRS, so be sure to set aside some of your earnings each paycheck. To ease the burden of filing and managing your taxes, you can utilize tax software, like TaxAct, that’s designed specifically for freelancers. 5. Market YourselfAs a freelance business owner, you don’t have a team to do all of your marketing for you. You have to market yourself all on your own. That means that you have to think of ways you can set yourself apart from your competition. When you think of marketing, you probably think about how you can push your products or services to other people. But it’s also important to consider how to market yourself. Yes, as a freelancer, you are a big part of your brand. For instance, think of a freelance photographer. Even if the photographer has the best portfolio in the area, customers don’t want to work with someone they don’t personally enjoy being around. You are just as important as your product or service. As the photographer, it’s your job to market yourself and to adapt to what each client needs. Some clients will want to work with you because you offered something different from the competition. Don’t just market whatever service or product you are offering – remember that most clients will choose to work with you because of you. via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/17/5-tips-to-get-your-freelance-business-up-and-running/
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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. If you’re starting your own business or looking to grow your business, having a good credit score can be critical. It determines your ability to get financing, as well as the interest rate you receive. Improving your credit score might seem like a daunting task, but the better your credit score, the more access to financing you’ll have available and the better your interest rates will be. Your credit score ranges from 350 to 850 and is generally calculated using 5 categories of information, each with varying weights. These include the following:
Unfortunately, for many of us, our credit scores simply aren’t where we’d like them to be. Whatever the reason, there are steps you can take to improve or repair your credit. Here are five steps you can take right now. Get a Copy of Your Credit ReportsYou can’t take action on your credit if you don’t know where you stand. So, the first thing you should do is get a copy of your credit report from each of the three major credit reporting agencies (TransUnion, Experian, and Equifax). Under federal law, you’re entitled to receive one free copy of your credit report per year from each credit reporting agency at www.annualcreditreport.com. It’s important to note that getting your credit report will not give you your credit score. However, free apps like Credit Karma, Credit Sesame, and WalletHub will give you a general idea of what your credit score looks like. Dispute Any Errors On Your Credit ReportAfter you receive your credit report, you should carefully review it to determine that everything in it is accurate. While major errors aren’t common, they can happen. And if you see any errors on your credit report – even minor ones – it’s worth disputing or correcting them. The sooner you fix any errors, the easier it’ll be to improve or repair your credit. You can typically dispute errors online at the credit reporting agency’s website or you can send a letter to the credit reporting agency to let them know of the error. Be sure to submit any documentation you have to support your dispute. Another option is to use an automated service like Dovly, which can dispute errors on your behalf. You can find more information about how to dispute errors on your credit report from the Federal Trade Commission website. Pay Late and Past-Due AccountsYour payment history is the most important factor that makes up your credit score. This makes logical sense – lenders want to be sure that they’ll get paid back and a history of on-time payments shows that you can do that. If you want to improve your credit score, you need to catch up on any late payments. There are two things you can do to get caught up – spend less than you earn and do whatever you can to earn more income. Creating a budget is a great strategy you can use to help you spend less than you earn. Figure out how much you make each month. Determine what you need to spend each month. And use the remainder to pay down debt. After you’ve created a budget, consider picking up a side hustle to improve your income. There are a lot of ways to earn extra money these days. Here are a few ideas to consider. The great thing about side hustling is that every dollar you earn from your side hustle can go towards paying down your debt. If you do these two things – create a budget and earn more income by picking up a side hustle – you’ll be well on your way to improving your financial standing. Improve Your Credit Utilization RatioThe second most important factor of your credit score is your credit utilization ratio. To a lender, the more credit you are using, the more risk they face that you won’t be able to pay them back. To determine your credit utilization ratio, take the amount of available credit you have and divide it by the amount of credit you are currently using. For example, if you have $10,000 of available credit and have a $5,000 balance, your credit utilization ratio would be 50%. A high credit utilization ratio can have a dramatic impact on your credit score. Indeed, it’s almost as important as your history of on-time payments. That means a high credit utilization ratio can hurt your credit score in almost the same manner as making late payments! If you can, try to reduce your balance on your credit cards to improve your credit utilization ratio. Lenders typically prefer a credit utilization ratio under 30%. So, if you have $10,000 of available credit, it’s best to keep your outstanding balance below $3,000. Pay All Bills On Time Going ForwardAs previously stated, your payment history is the most important factor when it comes to your credit score. That means if you want to repair your credit, you need to keep paying your bills on time. There’s no way around this. Creating a budget and picking up a side hustle (or two) are two surefire ways to make sure you have enough money to make on-time payments. In addition, make sure you know when your bills are due. If you’re comfortable with it, setting up auto-pay for all of your bills is a great way to make sure you never miss a payment. Otherwise, be sure to set reminders so you never forget. Final ThoughtsYour credit score is really important. If you have a better credit score, you’ll get lower rates on things like car loans, mortgages, and personal loans. Your credit score can even play a role when it comes to employment or housing. Whether it’s right or not, employers and landlords often look at your credit score to determine whether you’ll be a good employee or tenant. If this all feels overwhelming, start small with a trusted credit repair app like Dovly. Apps like Dovly can help boost your score with an automated credit repair engine that tracks, manages, and fixes credit scores. Dovly has a 92% success rate turning credit scores the right way round so you can get back to expanding your business without the burden of a bad credit. The things you need to do to improve or repair your credit aren’t a secret. If you pay your bills on time and keep your credit utilization low, you’ll be well on your way to a better credit score. via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/15/5-steps-freelancers-can-take-to-improve-or-repair-their-credit/
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If you are an individual freelancer, sole proprietor, or business owner operating under another entity type in New York, New Jersey, and Pennsylvania, you may have until January 3, 2022, to file individual and business tax returns and make estimated tax payments, if you have been affected by Hurricane Ida. In addition to the filing deadline being extended, the IRS is also abating late payment fees and penalties related to these tax payments, but interest will still be charged based on the original due date. This relief also postpones various tax filing and payment deadlines starting on September 1, 2021. If you are an individual freelancer or business affected by Ida, you will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. If you are an individual freelancer who had a valid extension to file their 2020 return by October 15, 2021, you will now have until January 3, 2022, to file it. However, tax payments related to these 2020 returns were due on May 17, 2021, and those payments are not eligible for this relief. The January 3, 2022, deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. Businesses with an original or extended due date also have the additional time including calendar-year partnerships and S-corporations with 2020 extensions due on September 15, 2021, and calendar-year corporations with 2020 extensions due on October 15, 2021. Freelancers in these designated disaster areas qualify for Hurricane Ida tax relief: The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. In New York, this currently includes the following areas in New York: · Bronx · Kings · New York · Queens · Richmond and Westchester Counties In New Jersey, it includes: · Bergen · Gloucester · Hunterdon · Middlesex · Passaic and Somerset Counties In Pennsylvania, it includes: · Bucks · Chester · Delaware · Montgomery · Philadelphia · York The relief applies to taxpayers in Ida-impacted localities subsequently designated by FEMA. As such, in other parts of these states, taxpayers will automatically receive the same filing and payment relief. The current list of eligible localities is available on the disaster relief page on IRS.gov. Tax relief is automatic for individual freelancers and businesses affected by Hurricane Ida, but interest still applies for late tax payments. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, interest will still be in charged on payments past the original deadline. If you received a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, call the number on the notice to have the penalty abated. In addition, the IRS stated that it, “will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area.” If you are a freelancer qualifying for this you can contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. If you as an individual, or through your freelance business in a federally declared disaster area, suffered uninsured or unreimbursed disaster-related losses you can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year (2020). Be sure to write the FEMA declaration number (4614 for New Jersey, 4615 for New York, 4618 for Pennsylvania) on any return claiming a loss. For more information and updates, visit the IRS disaster relief page has details on other returns, payments, and tax-related actions qualifying for the additional time. 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/2021/09/14/tax-deadlines-for-some-ny-and-nj-freelancers-are-extended/
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The IRS recently provided some additional guidance on claiming the Employee Retention Credit (ERC) which may impact your freelance business for the the third and fourth calendar quarters of 2021. As a reminder, if you have employees, you are considered an eligible employer for the ERC by the IRS if you engage in “a trade or business (1) whose trade or business’s operation is fully or partially suspended due to orders from a governmental authority limiting commerce, travel, or group meetings due to COVID-19; (2) that experiences a decline in gross receipts (as defined in Notices 2021-20 and 2021-23); or (3) is a recovery startup business.” In the eyes of the IRS, a recovery startup business is an employer that (1) is not otherwise an eligible employer under conditions (1) or (2) noted in the preceding paragraph; that (2) began carrying on a trade or business after Feb. 15, 2020; (3) with average annual gross receipts for the three tax years preceding the quarter in which it claims the credit of no more than $1 million. The key changes to the ERC under the American Rescue Plan Act (or ARCA) which may impact your freelance business for the third and fourth quarters of 2021, include: · The ERC availability is now extended from June 30, 2021, until December 31, 2021. (There has been some talk in Congress to suspend the program as of September 30, 2021, so stay tuned for updates.) · The required year-over-year gross receipts is reduced from 50% to 20%; · A safe harbor is provided that allows employers to use prior quarter gross receipts to determine eligibility; · Eligible employers can claim the credit against the employer’s share of Medicare tax rather than, as previously stated, against the employer’s share of Social Security tax (or its equivalent Railroad Retirement Tax Act portion). · It increases the limit on creditable wages from $10,000 in total to $10,000 per calendar quarter (i.e., $10,000 for first quarter 2021 and $10,000 for second quarter 2021); · A separate credit limit of $50,000 per calendar quarter applies to recovery startup businesses, after application of the $10,000 wage limit. The limit on the maximum ERC in the first half of 2021 of 70% of up to $10,000 of an employee’s qualified wages per calendar quarter (i.e., $7,000) continues to apply to the third and fourth calendar quarters of 2021. · The new guidance does not specifically indicate that start-up businesses can be eligible employers simply due to being a recovery startup business. Your business must meet the IRS and U.S. Treasury requirements to be considered a recovery startup. · In addition, the new statute does not specifically state that recovery startup businesses may be treated as small eligible employers (expanding the coverage to those businesses with 500 employees or fewer), the notice provides that Treasury and the IRS have concluded it is appropriate to read the small eligible employer rule of the original ERC guidance as if it applies to recovery startup businesses. Given some of the complexities related to the ERC for small businesses and particularly businesses that were started during the pandemic, it is a good idea to make sure your business is entitled to claim the ERC under both the original and the new updated guidance to avoid any tax issues later on. 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/2021/09/09/changes-to-the-employee-retention-credit-could-affect-your-freelance-business/
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This information was first published by the IRS and has been reproduced with permission. Subscribe to IRS tax tips here. Victims of Hurricane Ida now have until January 3, 2022, to file various individual and business tax returns and make tax payments The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. Currently this includes the entire state of Louisiana, as well as certain counties in New Jersey and New York. The current list of eligible localities is always available on the disaster relief page on IRS.gov. The tax relief postpones various tax filing and payment deadlines that occurred starting on August 26, 2021. As a result, affected individuals and businesses will have until January 3, 2022, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2020 return due to run out on October 15, 2021, will now have until January 3, 2022, to file. However, because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief. The January 3, 2022, deadline also applies to quarterly estimated income tax payments due on September 15, 2021, and the quarterly payroll and excise tax returns normally due on November 1, 2021. No matter the type of disaster or how devastating it is, before the IRS can choose to authorize tax relief, the Federal Emergency Management Agency must issue a major disaster declaration. Generally, the IRS will authorize disaster tax relief to all areas identified on a major disaster declaration if FEMA identifies at least one area qualifying for their Individual Assistance program. The IRS gives taxpayers more time to file and pay.Taxpayers whose address of record is in an area qualifying for IRS disaster tax relief will automatically receive extra time from the IRS to file returns and pay taxes. The IRS's disaster assistance page provides disaster updates and links to resources. Information is usually available on the IRS Twitter account as well. Taxpayers can also call the agency's disaster line at 866-532-5227 with questions. Taxpayers can qualify for a casualty loss tax deduction.People who have damaged or lost property due to a federally declared disaster may qualify to claim a casualty loss deduction. They can claim this on their current or prior-year tax return. This may result in a larger refund. People can apply for a disaster loan or grant.The Small Business Administration offers financial help to business owners, homeowners and renters. This help is for those in a federally declared disaster area. To qualify, a taxpayer must have filed all required tax returns. Taxpayers might need a tax return transcript.People who need a tax transcript to support their disaster claims can obtain free transcripts by using Get Transcript to access their transcripts immediately online or to request mail delivery. They can also call 800-908-9946 to request mail delivery or submit Form 4506-T, Request for Transcript of Tax Return. People who need a copy of their tax return, should file Form 4506, Request for Copy of Tax Return. The IRS waives the usual fees and expedites requests for copies of tax returns for people who need them to apply for disaster-related benefits or to file amended returns claiming disaster-related losses. If filing Forms 4506-T or 4506, the taxpayer should state on the form the request is disaster related and list the state and type of event. This helps speed up the process. People who relocate need to submit a change of address.After a disaster, people might need to temporarily relocate. Those who move should notify the IRS of their new address by submitting Form 8822, Change of Address. The IRS encourages affected taxpayers to review all federal disaster relief at DisasterAssistance.gov. via Freelancers Union Blog https://blog.freelancersunion.org/2021/09/08/how-a-major-disaster-can-affect-your-tax-obligations/ |
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