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We’ve all been there – the unbearable space between where you are and where you want to be in your business as a creative freelancer. Perhaps the current version of your career or business feels too small, safe, and limiting. Maybe you’ve outgrown your clients, revenue, and business model. Maybe you’re not even sure what your business model is (hey, there’s no shame in this game, most of us start with the default model!). You know there’s a next chapter waiting to be written – something more expansive, captivating, and motivating – but you’re darned if you know what that looks like or how to get there. Can you relate? Let’s give this unsettling place a name: The Wilderness. Being in The Wilderness might manifest as feeling lost, overwhelmed, or having lost your mojo. Maybe you feel resentment, even shame that your profit and loss sheet does not reflect the talent, potential, and hard work you put in. The Wilderness can feel scary because we don’t know how big it is, how long it will last, or what it means/says about us. As a business coach for creative freelancers (and a business owner myself), I’ve come to realize The Wilderness is somewhere we all visit. Rather than being something to fear, I’ve come to view it as a big old signpost that we need to make a change. Ready to move through The Wilderness and fully embrace the next fulfilling and profitable chapter of your creative business or career? Read on for three actionable steps to be on your merry way: 1) Get it outWhen we’re in The Wilderness, we tend to turn inward, meaning we keep all the confusion, discomfort, and fear inside where it morphs, grows, and generally wreaks havoc. In the last 24 hours alone, I’ve coached two clients who, when presented with a well-placed question and non-judgmental space to talk, came to some profound realizations. In both cases, these insights unlocked the story that was holding them back from the next big thing and gave rise to some surprisingly simple next steps. How might you get it out? Maybe your support person is a coach, partner, collaborator, and/or therapist. Not a verbal processor or in a position to hire a coach or therapist? I’m a later-in-life convert to journaling, specifically the Morning Pages. The most important thing is that you get your ideas out so they can be processed in the light of day! 2) Hang out with folks further along than youOK, this one can feel scary because you’re already feeling a little wobbly and now, I’m asking you to put yourself in the company of people that will make you feel even more stuck. Nope, not at all! This is about intentionally finding communities – from local networking groups to high-level masterminds, expert-led retreats, or coaching programs – that support individual and collective growth. Caveat: there are a whole lot of “experts” out there promising the world and delivering very little. Choose your mentors, groups, and people wisely. Here are a few suggestions:
3. Do the thingExciting, expansive, and lucrative new chapters in your life and business don’t just happen. You’ve got to create something, put it out into the world, test and refine it, and do the whole thing again. This, my friends, is not for the faint of heart. But every great leap is on the other side of discomfort, vulnerability, and experimentation. OK, that’s the pep talk. Now, how do you make it happen? Here are a few suggestions:
Remember, The Wilderness is a place we all find ourselves at some point. As uncomfortable as it is, take the gift of this time, get curious, and try things out. After all, as a creative, and natural born problem-solver, this is the work you were made for. I’m rooting for, and I’m here to support you every step of the way! via Freelancers Union Blog https://blog.freelancersunion.org/2024/01/03/are-there-tumbleweeds-in-your-freelance-business/
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Although no significant tax legislation was enacted in 2023, there were changes from 2022 tax legislation that will have an impact on 2023 tax returns as well as changes being announced for 2024. Here’s a quick run down to help you be prepared for the coming tax season and new year ahead.
If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) The phase out ranges for 2024 are as follows:
Now is the time to look at year-end tax planning to see which of the above and other tax savings might be available to you. In addition, you can also ahead toward retirement planning so you can take advantage of both tax savings for 2023 and look ahead to maximizing savings for 2024. This will not only provide certain tax advantages, but it will also ensure that one day you have a comfortable retirement! Remember to touch base with a qualified tax professional who can guide you appropriately in regard to these changes in relation to your specific tax situation. Jonathan Medows is a NYC-based CPA who specializes in taxes for consultants across the country. His website has a resource section with how-to articles and information for freelancers. https://www.cpaforfreelancers.com/ via Freelancers Union Blog https://blog.freelancersunion.org/2024/01/03/key-tax-changes-every-freelance-business-owner-should-know-for-tax-years-2023-and-2024/ First-Ever Photo Hub: Giving Access to State-of-the-Art Equipment and Studio Space for Freelancers12/21/2023
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Freelancers Union joins American Society of Media Photographers and MPB to Launch the Photo Hub, a State-of-the-art Studio and Equipment Facility for Photographers. Brooklyn, NY - The barriers to entry for aspiring photographers just got a whole lot lower, thanks to a groundbreaking partnership between the Freelancers Union, the American Society of Media Photographers (ASMP) New York, and MPB, the largest global platform to buy, sell and trade used photo and video gear. In a move to democratize access to high-quality photography equipment and studio space, the collaborative effort introduces the Photo Hub at the Freelancers Hub, nestled in Industry City, Brooklyn. Embarking on a career in photography often comes with a daunting price tag, where the cost of a decent camera alone can easily exceed $600, not to mention the additional expenses for studio lighting, lenses, backdrops, and more. Addressing this access and equity challenge, the Photo Hub emerges as a beacon of affordability and convenience, offering an extensive suite of photography equipment at the fingertips of creatives. "We're thrilled to have partnered with ASMP and MPB to provide our members with a gateway to refine their photography skills and unleash their creative potential," said Executive Director Rafael Espinal. "The Photo Hub represents an inclusive space where photographers of all levels can access top-notch equipment and professional studio facilities to bring their visions to life." “ASMP's Mission is to empower visual content creators. Photography is a competitive and expensive industry and creatives entering the space face many hurdles including money and access. With access to this studio and gear we hope that members will have one less roadblock to bringing their creative vision to life,” said Liam Alexander ASMP NY Chapter President. “We are so excited to help make Photo Hub a reality," said MPB's Vice President of Marketing Tammy Oler. "MPB is committed to making camera gear more accessible and affordable for everyone, and we believe that collaborations like this are vital to recognizing and removing barriers to inclusive storytelling. We can’t wait to see the work photographers are going to create using Photo Hub.” “Tenant collaborations like this are core to the Industry City story,” said Jeff Fein, Senior Vice President of Leasing at Industry City. “When two IC business owners meet over coffee or at a mixer on campus, it tends to spark something great, and you end up with an idea like the Photo Hub. This project will open doors for newcomers to their industry, create value for their members, and hopefully grow the creative community here at IC.” The Photo Hub, situated within the Freelancers Hub, presents an invaluable opportunity for ASMP NY and Freelancers Union members to rent the studio space for diverse photoshoots encompassing fashion, headshots, product photography, and beyond. Notably, ASMP members gain exclusive access to the studio space free of charge (by requesting their unique booking code via email), while Freelancers Union members can avail themselves of the space at a discounted rate of $60/hour, inclusive of comprehensive access to all Photo Hub equipment. Location, location, location. Industry City is a mecca for creative opportunities as both major organizations are headquartered there. Freelancers’ Union is located in Industry City’s Building 1, a 4,500 square-foot co-working and arts space. MPB is a tenant in Industry City’s Building 7 with a 35,000-square-foot office and warehouse. For more information and to explore the Photo Hub's offerings, please visit https://freelancershub.simplybook.me/v2/. Freelancers Union Freelancers Union is the largest and fastest-growing organization representing the 60 million independent workers across the country. It gives its over 500,000 members a voice through policy advocacy, benefits, online resources, and educational and community-building events in nearly two dozen cities. Since its founding, Freelancers Union has fought for and won protections for freelance workers, including the first-of-its-kind Freelance Isn’t Free Act in New York City, which gives freelancers unprecedented protection from nonpayment and underpayment. In 2018, Freelancers Union launched Freelancers Hub, a free coworking space and training and resource center for freelancers, with support from the NYC Mayor’s Office of Media and Entertainment. Learn more at www.freelancersunion.org. American Society of Media Photographers (ASMP) New York Chapter ASMP is the home for Visual Content Creators. Whether you’re a photographer, YouTuber, filmmaker, enthusiast, or a student who wants a career in the fast-changing and diverse visual content creation landscape, ASMP is built to help you succeed. Together, our community of more than 6,500 Members provides a platform for education, advocacy, and meaningful change. Learn more at www.asmpny.org MPB MPB transforms the way people buy, sell and trade used photo and video gear. As the largest global platform for used photography and videography equipment, MPB is a destination for everyone, whether you’ve just discovered your passion for visual storytelling or you’re already a pro. Founded by Matt Barker in 2011, MPB has always been committed to making gear more accessible and affordable, and building a more sustainable future. MPB recirculates nearly half a million used products every year, extending the life and creative potential of photo and video equipment for creators around the world. Headquartered in the creative communities of Brooklyn, Brighton and Berlin, the MPB team includes trained camera experts and seasoned photographers and videographers who bring their passion to work every day to deliver outstanding service. via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/21/christmas-comes-early-for-nyc-photographers-with-launch-of-first-ever-photo-hub-giving-access-to-hristmas-comes-early-for-nyc-photographers-with-launch-of-first-ever-photo-hub-giving-ac/
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When you work for others, you have the luxury (or crutch) of only having compensation conversations with your boss. Independent workers have to own their worth in a way that people who “work for the man” never have to. Without a corporate “safety net,” solopreneurs must take full ownership of their work and their value in the marketplace. When you’re 100% in charge of the money that facilitates your life and the time it takes to make it, you are forced to think about it differently. When you are the sole architect of your financial destiny, your relationship with money undergoes a profound shift. Independent workers have to adopt a different mindset that constantly evaluates the intrinsic value of their skills, time, and expertise. As an entrepreneur, finances are not just an aspect of running a business but a central component of a broader, self-directed enterprise that defines and reinforces your worth. This paradigm shift requires independent workers to approach money strategically and proactively. They must engage in continuous self-assessment, skill development, and market awareness to ensure that they not only get paid what they deserve but are constantly evaluating what they need and their intrinsic value. You have to constantly adjust your pricing strategies to be one step ahead of where you are—driving constant improvement. Unlike those lulled into complacency by the myth of the stability of a traditional job, independent workers navigate the ebb and flow of market demands, placing a premium on adaptability, innovation, and a nuanced understanding of their value proposition. The free agency that comes with being an independent worker creates a unique relationship with money – one that demands a heightened awareness of personal worth, a strategic approach to financial negotiations, and an ongoing commitment to professional development. In this ever-evolving landscape, the ability to navigate the intersection of passion, skill, and economic viability becomes a requisite and a defining characteristic of the independent worker's journey. This is the second blog in a three-part series about Boss Mindset – how to own our work, worth, and wisdom. Let’s talk about what your work is worth. Act Like a Business, Price Like a BusinessWhen you work for someone else, you might not even know what they’re actually charging for the end product and how your time fits into it. The larger structure dilutes your time and effort. As a business owner, you have to understand everything that goes into running your business and delivering value for your clients. This constantly balances what you need, what you charge, and the overhead that makes your business run. Just because you’re a free agent doesn’t mean that you don’t need and deserve the same things that “normal” employees get. When building your pricing structure, you need to consider taxes, insurance, paid time off, and retirement savings. These are not luxuries; they are necessities, and now you’re in charge of making sure you get them because that nice HR lady doesn’t have your back anymore. You might have much lower overhead than a larger company, and so you justify hourly rates that don’t include the costs it takes to run your business of one. A business of one is still a business – your clients need to be paying you like a business. A professional business also has overhead. As a solopreneur, your overhead is likely pretty low, but you have to plan for and strategically invest in the infrastructure needed to run a business. Clients can tell when you’re holding everything together with duct tape and bubble gum. This may mean you need to ditch the free Zoom account, the Gmail address, and the Facebook page that serves as your website. Your infrastructure should always be one step ahead of you in terms of professionalism (a.k.a. dress for the job you want, not the job you have). The trick here is focusing on the pieces necessary to your work and how you need to come off to clients. I’m not saying you overspend on a fancy website if most clients find you through referrals. Still, if your business revolves around Zoom calls and you always have to end at the 45-minute mark because your free account is running out, that doesn’t signal to clients that you're worth professional-level pricing. The Rising TideOur society has created a stigma around talking openly about money and compensation. That reinforces power structures where people get paid less than they deserve. One stark example is the massive gender pay gap for independent workers. Your worth is about so much more than money. It comes down to what you need and what the market will give you. You must always balance being fair, competitive in the market, and getting paid top rates for your expertise. That balance isn’t always easy. Doing your research is the only way to know what your skills are worth.
Once you know what the market pays for your skillset, check your assumptions about your value. You might be leaning toward asking for less to be competitive, but you should be in line with or ahead of your peers and competitors for two reasons.
Owning your worth as an independent worker is bigger than just your pricing; it is about raising the bar for independent talent. Money is the Least of ItFreelancing, like life, is a series of thresholds. When you first start, you have to prove to yourself that it can work, and to a certain extent, you haven’t fully committed until you start to see some success. Once you cross that threshold, you realize that more is possible; whatever your initial reasons for going out on your own, you now know that working for yourself checks many more boxes than just money. Freelancing becomes priceless, not only because there is no longer a limit to the amount of money you can make if you’re willing to work for it, but there’s also no one limiting your freedom to choose what you do, who you do it for, how you do it, where you do it, when you do it…the list goes on and one. The thresholds from there only lead to progressively higher levels of freedom. When you have your work dialed in, your business infrastructure supporting you, and the data + confidence needed to charge like a business, your clients won’t blink an eye when you charge them top rates. In fact, the best ones will be telling you to charge more. At that point, there’s nothing anyone could offer you to return to a “normal job” because the possibilities for your personal, professional, and financial growth are endless. Solopreneurs at this level neither fear nor worship money. In a world that wants us to define our worth solely in financial terms but not talk about money explicitly, we jailbreak wealth; we take back the power to define it for ourselves, demand it, and work relentlessly toward it. via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/19/boss-mindset-what-is-my-work-worth/
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This article is posted with permission from our partner TaxAct. File your freelance taxes with confidence using TaxAct’s easy-to-use tax software. Freelancers Union members get 25% off the cost of federal and state tax filing: https://freelancersunion.org/tax-center/ Whether you file early or wait until the tax deadline, there are simple things you can do today to help you cruise through tax season. Use the following five tips to start getting organized. Step 1: Know when your tax documents will arriveYour tax forms should arrive in the mail starting in January. When the forms start to arrive, take a moment to pull out a file folder, label it, and set it somewhere safe. As new tax documents come in, add each one to your new Tax Day folder so everything you need is in one place. Most common tax forms are sent out by late January, so if you’re missing a W-2 or 1099 in mid-February, go ahead and track it down. Having everything you need in one place sets you up for a Tax Day win. Step 2: Review your year’s milestonesDid you get married this year? Have a baby? Buy a house or car? If you made a big life change, congratulations! Since Uncle Sam isn’t a traditional “cool uncle,” don’t expect a gift from your registry. Instead, you might need some additional documentation and possibly extra tax forms. For example, if you got married, check that your filing name matches what’s on your social security card. If you moved, make sure you update your address — you can do that as you file. You’ll also want to decide how you and your spouse will file this year. Your choices are married filing jointly or married filing separately. Remember, whether you tied the knot at New Year’s brunch in January or right before the ball dropped in December, the IRS considers you married for the entire year. Make sure your information reflects that! Step 3: Consider if you’ll itemizeA majority of taxpayers tend to take the standard deduction. However, if your itemized deductions add up to more than the standard deduction you qualify to claim, it might be a better idea to itemize. When you file with TaxAct®, we can help you run the numbers each way to see which choice works best for you. Here are the standard deduction rates for tax year 2023 in comparison with 2022:
Planning to itemize? Get started organizing your expense receipts from the year. An easy way to combine digital and hard copies is to snap, save, and sort them into your phone’s photo albums. That way, they’re all in one place. Know you’ll take the standard deduction? Nice. Sit back, relax, and skip receipt gathering altogether. Step 4: Set time aside to fileLife is hectic. And somehow, the second you sit down to do your taxes is when that chaos escalates. Show your schedule who’s boss. Try clearing a designated block of time on your calendar to file. Go all out! Schedule a playdate for the kids, put on some motivating music, and get down to business. By assigning that time now, you remove the “When will I prepare my taxes?!” stress from your life. And when the time rolls around, you’ll have an environment that lets you focus. Step 5: Find a tax partner that helps you succeedTaxAct is designed to help you hang on to more of what’s already yours. We’ll walk you through each section of your taxes, step by step, prompting you with tips for deductions and credits that you may not know about. Best of all, our tax preparation solutions help you to prepare your taxes quickly so that you can get back to your life. Isn’t that the kind of partner you want in your corner on Tax Day? We’re ready to help you succeed. Main takeawaysBy addressing little things early and clearing away potential filing obstacles, when you sit down to prepare taxes in a few months there’ll be nothing standing between you and filing success — except maybe a pile of snacks. And who are we kidding? You’ll need those. This article is for informational purposes only and not legal or financial advice.All TaxAct offers, products and services are subject to applicable terms and conditions. via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/19/organize-your-way-to-tax-day-5-steps-for-success/
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Stress is a normal part of life. Stress can come from physical causes like not getting enough sleep or having an illness. Another cause for stress can be emotional, like worrying about not having enough money or the death of a loved one. Stress can also come from less dramatic causes, like everyday obligations and pressures that make you feel that you're not in control. Your body’s response to stress is supposed to protect you. But if it's constant, it can harm you. The hormone cortisol is released in response to stress. Studies suggest that the high levels of cortisol from long-term stress can increase blood cholesterol, triglycerides, blood sugar, and blood pressure. These are common risk factors for heart disease. This stress can also cause changes that promote the buildup of plaque deposits in the arteries. Even minor stress can trigger heart problems like poor blood flow to the heart muscle. This is a condition in which the heart doesn't get enough blood or oxygen. And long-term stress can affect how the blood clots. This makes the blood stickier and increases the risk of stroke. In addition, people who have a lot of stress may smoke or choose other unhealthy ways to deal with stress. Common responses to stress include:
People respond to stressful situations differently. Some react strongly to a situation. Others are relaxed and unconcerned. Luckily, you can decrease the effect of stress on your body. First, identify situations that cause stress. Although difficult, try to control your mental and physical reactions to these stressful situations. Try the following to help manage stress and keep your heart healthy. Get plenty of exerciseExercise can help counteract the harmful effects of stress. For heart health, aim for at least 150 minutes of moderate-intensity exercise per week. This can be done in 30-minute sessions, 5 days a week. Exercise can help to improve cardiovascular health by controlling weight, improving cholesterol, and lowering blood pressure. Exercise has another benefit that lowers stress. People who exercise have a reduced physical response to stress. Their blood pressure and heart rates don't go up as high as people under stress who don't exercise. Regular exercise can also reduce the risk of depression, another risk factor for heart disease. Need exercise motivation? Get a pedometer and try to walk 10,000 to 12,000 steps per day. This may also help you maintain your weight. With a pedometer, you get instant feedback and credit for all you do, such as taking the stairs instead of the elevator. Build a strong support systemResearch suggests that having a strong support network, like being married, having someone you can talk to and trust, or belonging to organizations or a religion, can reduce your stress level and your risk of heart disease. If you already have heart disease, this same network can help reduce your risk for heart attack. Having at least one person you can rely on takes a heavy burden off you and provides comfort. A strong support system helps you take better care of yourself, too. Research shows that a lack of social support increases the chance of engaging in unhealthy behaviors like smoking, eating a high-fat diet, and drinking too much alcohol. Get treatment for constant depression or anxietyDepression, anxiety, and other mental health conditions can increase your risk of dying from heart disease, if you already have it. Research suggests that long-term anxiety or emotional stress can increase the risk for sudden cardiac death. To reduce your anxiety level, try activities that reduce stress like yoga, walking meditation, traditional meditation, guided imagery, or other methods. Look for classes in your area. Alcohol, tobacco, and caffeine can increase feelings of anxiety and increase your stress and blood pressure. Cutting back or quitting these substances may help decrease your anxiety and stress. Talk with your healthcare provider if you have feelings of depression or anxiety. Ask about medicines that can help. Reduce work stressStudies show having a demanding job that offers you few opportunities to make decisions or provides little reward can increase your risk for heart disease. Stress at work becomes even more of a problem when you don't have a strong support system or you have long-term anxiety. If you can't find a different position within your company, do what you can to gain control over your environment. Try to take some time away from work every day. Do something that is relaxing and that you enjoy. It may be reading, walking, or deep breathing. Your employer may offer an employee assistance program (EAP) to help you manage stress and anxiety. A counselor can help advise strategies to help you lower your work-related stress. If you think you're at an increased risk for heart disease because of stress in your life, talk with your provider. They may advise counseling, classes, or other programs to help you lower your stress level and your risk for heart disease. via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/13/stress-can-increase-your-risk-for-heart-disease-2/
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I still remember the thrill of getting my first ever freelance assignment – after 3 whole months spent creating and perfecting proposals, I had finally made it. Someone thought I was the best fit for their project. They chose ME. It was December 21st, 2011. In hindsight, I think the timing helped a lot. It was a $20 gig, and as an established freelancer, I know now I wouldn’t go through the process of setting up a new client for that small of a sum 4 days before Christmas. Which leads us to the point – as a beginner freelancer, the holiday season is a potential goldmine for you. When nobody is working, who’s there to save the day?It’s one of the beautiful things about freelancing – you can choose when to work. And established freelancers choose indeed. After a profitable year, do you think they are going to take that $50 project that arrives on December 28th and is due on December 27th? Nah. I asked a few clients of mine, just to double-check my theory. They all confirmed. Finding freelancers to take on jobs during the holidays can quickly turn into a nightmare. And that is where you come in as a beginner. Let me be clear – you are not making this for the money. And I don’t recommend freelancers to skip the holidays – I don’t want anyone to end up burned out from reading this article. I want you to be available at a time of the year when (almost) nobody is, so that you can take projects nobody wants. Our clients are just like us – they’re humans. If you are there to save their day on Christmas Eve, they will remember you on January the 28th, when a big project comes that’s right up your alley. Reciprocation is a growth hack! The big question is… how can you let them know you will be available? The perfect email campaignYou are lucky, because in this case, the best way is also the simplest one – send them an email! More specifically, plan a small cold email outreach campaign and execute it. There is a perfect timing for this, and it goes from December 1st to December 15th. Earlier than that, you risk potential clients to forget it. Later than that, they’ll probably be too busy to even notice. Deliver the great news right in the subject line – This freelancer is available throughout the holidays! In my experience, this works better with agencies. They tend to have a wider client base, possibly in different countries, including some where being open during the holidays is perfectly normal. But I am not just talking about potential clients. Quite the opposite. This is also a perfect opportunity to get back in touch with previous clients of yours who’ve been dormant for a while. They know you and the quality work you deliver. If they are open during the holidays, they’ll be very happy to know you will be there to support them. Extra tip: if you are not sure whether or not they’ll stay open, check the email signature of your contacts within the organization. Usually, it has all the info you need. Not ready to take on projects yet?What if you are an aspiring freelancer, not yet ready to take on work? Maybe you are starting to freelance as a side hustle. Maybe you are suffering from imposter syndrome. Whatever the reason, if that’s your case, the holidays can still be a fruitful time for your freelance business! Here are a few ways you can make the most of your time off:
(If you have one you’ve been eyeing for quite a while, you may even ‘suggest’ someone to get it to you as a Christmas present) The holiday season is coming – are you ready to make the most of it? via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/13/the-holiday-season-is-coming-how-beginner-freelancers-can-make-the-most-of-it/ Decreased 1099-K Reporting Thresholds in 2024 May Increase Your Freelance Tax Obligations12/12/2023
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Over the past several years, there has been a debate over changes to the Form 1099-K reporting threshold. The 1099-K is a form that was introduced in 2022 for third-party payment platforms such as Etsy, Shopify, and other e-commerce platforms to report the sales their users transact each year for income tax purposes. If your freelance business generates income and receives payments through these platforms you need to be aware that the changes to the reporting thresholds that were slated for 2022 (and again in 2023), from $20,000 in annual gross sales to trigger reporting to $600 have not yet been instituted. It is extremely important regardless of these changes that you track and report all income you generate from these platforms. It is anticipated that for calendar year 2024 a phased-in approach will be instituted. This will change the current de minimis threshold from $20,000 (and over 200 reportable transactions) to $600. The change was considered drastic, prompting the IRS to back off on enforcing the new Form 1009-K rules and try to implement a stepwise approach instead. The proposed 1099-K compromise recently announced will not affect freelance tax filings for 2023. If the proposal is accepted, the $600 threshold will be reached over time, with the threshold for 2024 set at $5,000. To make sure your freelance tax filings are in compliance with these reporting rules, review the following facts about 1099-K reporting:
There will likely be further clarification on the 1099-K thresholds and reporting in the near future, so stay tuned for updates. Now that you know about changes to 1099-Ks affecting freelancers, these tips can help you with your own 1099 reporting:
Make sure to factor in any income from third-party payment platforms in your estimated tax payments at the federal, state, and local levels. You must pay tax on the money you earn or receive from activities occurring on TPSOs throughout the year, either through withholding or estimated tax payments. If these payments are in addition to a W-2 job or pension, and your tax withholding for these income streams is not enough, you will need to make additional estimated tax payments. If you have multiple revenue streams from third-party payment or e-commerce apps and other sources, it is vital that you can accurately track and report all of the transactions you are facilitating. This will help protect you in the case of an audit and give you the most accurate numbers that you can use to plan for the year ahead. Jonathan Medows is a NYC-based CPA who specializes in taxes for consultants across the country. His website has a resource section with how-to articles and information for freelancers. https://www.cpaforfreelancers.com/ via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/12/decreased-1099-k-reporting-thresholds-in-2024-may-increase-your-freelance-tax-obligations/
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IR-2023-221, Nov. 21, 2023 WASHINGTON — Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74 announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023. As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023. Given the complexity of the new provision, the large number of individual taxpayers affected and the need for stakeholders to have certainty with enough lead time, the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP). Following feedback from the tax community, the IRS is also looking to make updates to the Form 1040 and related schedules for 2024 that would make the reporting process easier for taxpayers. Changes to the Form 1040 series – the core tax form for more than 150 million taxpayers – are complex and take time; delaying changes to tax year 2024 allows for additional feedback. "We spent many months gathering feedback from third party groups and others, and it became increasingly clear we need additional time to effectively implement the new reporting requirements," said IRS Commissioner Danny Werfel. "Taking this phased-in approach is the right thing to do for the purposes of tax administration, and it prevents unnecessary confusion as we continue to look at changes to the Form 1040. It's clear that an additional delay for tax year 2023 will avoid problems for taxpayers, tax professionals and others in this area." The ARP required third party settlement organizations (TPSOs), which include popular payment apps and online marketplaces, to report payments of more than $600 for the sale of goods and services on a Form 1099-K starting in 2022. These forms would go to the IRS and to taxpayers and would help taxpayers fill out their tax returns. Before the ARP, the reporting requirement applied only to the sale of goods and services involving more than 200 transactions per year totaling over $20,000. The IRS temporarily delayed the new requirement last year. Reporting requirements do not apply to personal transactions such as birthday or holiday gifts, sharing the cost of a car ride or meal, or paying a family member or another for a household bill. These payments are not taxable and should not be reported on Form 1099-K. However, the casual sale of goods and services, including selling used personal items like clothing, furniture and other household items for a loss, could generate a Form 1099-K for many people, even if the seller has no tax liability from those sales. This complexity in distinguishing between these types of transactions factored into the IRS decision to delay the reporting requirements an additional year and to plan for a threshold of $5,000 for 2024 in order to phase in implementation. The IRS invites feedback on the threshold of $5,000 for tax year 2024 and other elements of the reporting requirement, including how best to focus reporting on taxable transactions. "The IRS will use this additional time to continue carefully crafting a way forward to minimize burden," Werfel said. "We want to make this as easy as possible for taxpayers. We will work to make the new reporting requirements easier for them, and we'll work closely with third party groups, tax professionals and others to find the smoothest path to ensure compliance with the law. This is consistent with our Strategic Operating Plan. The IRS is focused on meeting taxpayers where they are and helping them get it right the first time." Expanded information reporting, which will occur as the result of the change in thresholds for Form 1099-K, is important because it increases tax compliance and can reduce burden on taxpayers seeking to follow the law. The IRS believes that expansion must be managed carefully to help ensure that Forms 1099-K are issued only to taxpayers who should receive them. In addition, it's important that taxpayers understand what to do as a result of this reporting, and that tax professionals and software providers have the information they need to assist taxpayers. The IRS will continue to provide information on IRS.gov/1099k. Fact Sheet 2023-27 contains more details about this announcement. via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/06/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5-000-for-2024-to-phase-in-implementation/
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Ah, cybersecurity. The word that instantly makes us think of stock images of a lonely finger pressing a holographic sign of a lock on a black and blue background. The lock symbolizes protection, the colors – determination, and the hand would be… action? Even if people wanted to find out more about cybersecurity, a lot of resources would be just like this stock image: very serious, but way too abstract. In reality, cybersecurity practices are already present as specific parts of our daily routine. Does your laptop lock itself after being inactive for 15 minutes? Yes? Congratulations, you’re on a path to a protected digital life! Now, tune it down to 1 minute to be even safer. Cybersecurity can seem to be weird, stupid, scary, and hard. But guess what, that’s exactly how a comedian Judy Carter advises to approach a writing process for the jokes. Meaning, cybersecurity can be fun! Today, we’ll follow the advice of Judy and turn negativity into fun. But not to make jokes about cybersecurity – rather to understand it better. Cybersecuritoons – the fun way to grasp cybersecurityCorporate employees have to go through cybersecurity training. You know, those videos about a secure development lifecycle that everybody watches but hardly anyone ever remembers. Freelancers are usually on their own if they want to learn how to protect themselves, but their time is way too valuable to waste on long and exhausting cybersecurity courses. Especially when they are not tailored to the resources that freelance workers have in comparison to corporations. Moonlock, the cybersecurity division of MacPaw, made cybersecurity training that takes only 6 minutes to watch and is packed with practical information for everyone. It goes by the name Cybersecuritoons and is available for free to anyone on the Moonlock’s YouTube channel. The entire training consists of 4 episodes that take 1 minute and 30 seconds each. And to make it fun and non-boring, Moonlock animated the whole thing with the help of a Ukrainian animation studio Animagrad. Each Cybersecuritoon covers one topic that is essential for understanding: passwords, remote work, phishing, and malware. Through bright animations and memorable characters, the creators hope to unpack complex cybersecurity tech into tools anyone can use. Here’s a brief overview of the course for the curious ones. Passwords can be weirdAdvice to change your password often has already become a staple joke. Even The New Yorker writes humorous essays about it. We’re not supposed to reuse the same password in multiple accounts, but if we’re about to make dozens of them, how we’re supposed to remember them all? Forasmuch as the biggest rule of cybersecurity is not to write passwords down. So, here we are, dreading the moment when we have to come up with a new password. And when this moment comes, we are looking at the screen, overwhelmed and lost. The first episode of Cybersecuritoons recommends seeing passwords as keys to your property. Store them in a keychain and never ever put the same lock on all doors. Prevent breaking and entering into your accounts with passphrases instead of easy combinations. And set up the alarm system with two-factor authentication, so nobody can get inside even if they somehow got a copy of your key. Remote work is kind of scaryMoonlock is no stranger to work from home. Like most companies, the team had to switch to remote work during the pandemic. But after the full-scale invasion of Russia into Ukraine, a lot of team members had to seek shelter in different corners of the globe, fleeing the war. A part of Moonlock is staying in Kyiv at the moment, choosing to work from their homes or from the headquarters of MacPaw. And if the rule of separating corporate devices from personal ones doesn’t really apply to freelancers, being vigilant while connecting to public Wi-Fi is worth your attention. In a coworking space, it’s better to lock your laptop once you’re leaving your desk, even for a second. You’d be surprised how many attackers are in public spaces snooping around for our sensitive information. The second Cybersecuritoon talks about that and more in just 90 seconds. Phishing is not that stupidDo you know how to spot a phishing scam? The one with the Nigerian prince is too obvious, but the ones that pose as your local business or your bank are sneaky. These days, phishing spreads over text messages, emails, phone calls, and pretends to be from someone you know or a service you use regularly. Phishing plays on your emotions, using the sense of urgency, and not giving you time to think about the situation with a cool-headed approach. Even the best of us might be caught on the hook of scammers. The Olympics were attacked in 2020 by a massive phishing attack in an attempt to get the personal information of the Olympic fans. As a freelancer, you might be communicating with many different people on business, provide them with your email and phone number, potentially exposing yourself to a risk. Brushing up on your knowledge of red flags and tools to avoid the attack is essential. Especially when the knowledge comes wrapped into a short cartoon that you might watch over a morning coffee. Malware shouldn’t be hardBack in the day we only knew viruses. We kind of took them for granted and braced ourselves to fight them from the very first day a computer appeared in our household. Antivirus was the first program we installed, right after drivers for a sound system, web cameras, and a graphic card. But as the world shifted to work within online spaces, viruses stopped being the only trouble that might compromise our data. Adware, spyware, keyloggers, browser hijackers – you name it – are types of malware that might sneak on your computer through many doors, break the device, and steal your information. Knowing malware and what it’s capable of helps us understand where it comes from and how to take preventative measures. The final Cybersecuritoon lays out the many faces of malware, breaking it down by the kinds of threats it poses. So, next time your antivirus alerts you of a worm found in your system, you will know to turn off the internet connection immediately instead of simply moving it to quarantine. via Freelancers Union Blog https://blog.freelancersunion.org/2023/12/05/watch-cartoons-to-protect-your-digital-life/ |
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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