Freelancing in the_digital_age_july_2018

Freelancing in the_digital_age_july_2018
OUR MISSION SKILLS WE TEACH The Knowledge House (TKH) empowers and sustains a talent pipeline of technologists, entrepreneurs, and digital leaders, who will uplift their communities out of poverty. Digital Fluency Graphic Design/Usability Cross-Platform Development Front-End Web Development Server-side Technologies Data Science Project Management Business Analytics Professionalism OUR FELLOWS Our fellows possess a sense of intellectual curiosity, professionalism, resourcefulness, and commitment to their community. By becoming a TKH fellow, you will be joining a network of like-minded young adults looking to break into tech or increase their already existing skillset.
SEE WHAT OUR ALUMNI HAVE TO SAY ABOUT THEIR EXPERIENCE AT TKH "The Knowledge House has been able to increase my knowledge in programming as well as teach me how to perform in the professional environment. I was also able to release my own products and expand my horizons in programming. The Knowledge House was also able to help me land a job in the field I want and help me continue to be the best I can." -Jose Ortiz (Former TKH Student and Instructor, & Full-Stack Developer at Collectively ) WANT TO KNOW MORE? CONTACT Programs - Madeline | mvera@theknowledgehouse.org Events & Outreach - Cassandra | cpierre-louis@theknowledgehouse.org Volunteer & Industry Engagement - Joe | jcarrano@theknowledgehouse.org "The best part of being here at TKH is the love and motivation I get from everyone around me. Usually, I get shunned for my enthusiasm but being here I am allowed to grow my center of gravity" -Mouminatou Barry (Front-End Web Developer, Oath)
CALLING ALL VOLUNTEERS! BE A PART OF OUR VOLUNTEER INITIATIVE PROGRAM (VIP), AND ENGAGE WITH ASPIRING TECHNOLOGISTS THROUGH: MENTORSHIP TECHNICAL SKILL REVIEWS CURRICULUM REVIEWS FACILITATING WORKSHOPS GUEST SPEAKING HOSTING A SITE VISIT MOCK INTERVIEWS FOR MORE INFORMATION, PLEASE CONTACT: (646) 348-0652 JCARRANO@THEKNOWLEDGEHOUSE.ORG THEKNOWLEDGEHOUSE.ORG/VOLUNTEER 1231 Lafayette Ave | Bronx, NY 10474 JOE CARRANO
Free and Low-cost Resources for Freelancers Articles, Guides, & Resources Freelancers Union Samaschool Skillcrush Ultimate Guide to Going Freelance Medium Freelance to Win Contracts, Billing, Payments And Co Free Agent Harvest Wave ZipBooks Shake Time Management Hours Completo Trello Taxes Tax Act Electronic Federal Tax Payment System (EFTPS) Acorns Proposals Samaschool Sources: https://www.samaschool.org/tools, https://www.freelancersunion.org/resources/
HOW TO BUILD A THRIVING NETWORK freelancers union NETWORKING GUIDE B Y J U S T I N E C L AY O F PITCH PERFECT PRESENTATION As a business coach for creative professionals, I’ve learned that most freelancers and entrepreneurs are happier, do better work and make more money when they have a thriving network of trusted collaborators, supporters and advisors. If you’re ready to let go of your old ideas about networking and open yourself up to the unlimited potential and opportunities out there, here are the 3 steps to finding your tribe, building a thriving network, and having fun along the way.
Do you know the difference between freelancers who make great money, working with clients they love and those in permanent hustle/scramble mode? Successful entrepreneurs and freelancers focus their efforts where they will get the best results in the least amount of time. This isn’t about quick fixes or skipping steps, but doing the necessary work and planning ahead of time so you set yourself up for success. Here’s what you’ll need to have in place before you start: 1. Your compelling pitch 2. Your ideal client profile So let’s give you the ‘how’ to nailing those down: HOW TO CRAFT YOUR COMPELLING PITCH I realize the term ‘elevator pitch’ is pretty loaded, which is why I never use it. I also don’t believe a 1-minute, jam packed monologue ever feels natural, or inspires genuine connection. That said, you have just a few seconds to make a great first impression, so it’s important you’re clear on what you do, who you do it for, how they benefit from working with you, and what they need to do next to hire you. Here’s what a compelling pitch should include: • Your ideal client description • The results people get from working with you • The benefit of this result • What you sell • What makes you unique and stand out from your competitors • How they can work with you To do: Start crafting your compelling pitch using the structure above. The most important thing to remember is it should be a conversation starter, not something you’ll say in full. Your goal is to pique the other person’s interest so they ask to hear more. KNOW WHO YOUR IDEAL CLIENT IS As much as I want you to enjoy networking, none of us have time to be out every night, so you need to be strategic. The next step to setting yourself up for success is getting crystal clear on who your ideal client is. Because when you know who your ideal client is, what they struggle with and what they need, you have CLARITY, and that’s a beautiful thing! So what makes someone an ideal client? They: • Know they need your help • Recognize working with you is essential • Are easily contactable • Will pay your fees without negotiating • Will get results from working with you • Will refer others • Are people you will enjoy working with S T E P 1 LAY THE GROUNDWORK
Don’t those kinds of clients sound great? Here’s what you need to know to craft your ideal client profile: • The industry they work in e.g. publishing, food, fashion etc. • Title (may be more than one) e.g. art director, creative director, Marketing Director • Sensibility • Values • Personality/style • What their issues and struggles and aspirations are • What they need right now I can’t emphasize the importance of getting to know your ideal client enough (so I’ll try by bolding and italicizing it!). It’s the key to finding your tribe, creating content, and tailoring your services to serve them. If you’re not crystal clear on this, I’d recommend you invest some time focusing on developing your ideal client profile. I promise, you’ll be happier, more effective and more successful as a result. Networking is not about being the most-connected person, but the best-connected person. A strong network is a mix of close allies and looser acquaintances. Your allies are the people in your inner circle; your collaborators, accountability partners and centers of influence. Your loose acquaintances might include people you admire, those who work in different industries, live in different cities (or even countries), and provide diversity and strength to your network. By connecting with both types, you’ll develop a support network of collaborators, resources, inspiration and referral partners. There are 4 key groups that you should have in your network: 1. Clients (because good clients refer other good clients) 2. Strategic Alliances (people who do something different from you, but serve the same ideal client) 3. Trusted Advisors (business advisors, mentors, vendors, etc.) 4. Referral Sources (your unpaid sales force) To do: Look at your network and see where it’s strong and where you need to fill in some gaps. For example, if you’re growing your design business with the intention of landing bigger, better projects, your focus might be on developing relationships with great creatives such as web developers and strategists so you can build an entire team. S T E P 2 KNOW WHO SHOULD BE IN YOUR NETWORK
BIO Justine Clay is a speaker and business coach for creative entrepreneurs and freelancers. Through a series of clear, actionable steps, Justine will teach you how to you identify what makes you stand out from the crowd, create a marketing message that resonates with your ideal clients, and build a successful and fulfilling creative business or career. Sign up for Justine’s free 6-part video series at www.6stepstomoredreamclients.com and start growing your creative business or career today! Now you’ve identified what you do and who your ideal client is, you need to come out from behind the computer and get out and meet them. But where do you find them? There are lots of organizations that have already gathered large lists of your ideal clients for you, all you need to do it tap into them. Go back to your ideal client profile or avatar and ask yourself (or better still, your ideal clients) the following: • What professional associations do my ideal clients belong to? • What conferences do they attend? • Where do they hang out? (private clubs etc.) • What trade pubs, blogs and newsletters they read? • Who do they follow on social media? • What podcasts do they listen to? Answering these questions will help you identify where your clients are hanging out – on-line and off. When you’re armed with this valuable information, you can strategically choose the events you go to and enter with a clear plan of who you want to meet, what you’d like to share with them and what you’d like the outcome to be. OK, you’re ready to go! If you’re new to networking, take it one step at a time and get just one event in your calendar. Once you’ve got your feet wet, try a few different places on for size – go back to the ones you like, skip the ones you don’t. Before you know it, your network will be full of like-minded allies and resources you can give and received support from. Here’s to your success! S T E P 3 KNOW WHERE YOUR CLIENTS HANG OUT
1. Adopt an attitude of “what can I do for you?” rather than “what can you do for me?” 2. Have business cards (and use them judiciously) 3. Know your elevator pitch 4. Know your ideal client profile 5. Make eye contact 6. Be genuine 7. Bring your whole self to the event. If you’re a mum, there’s no need to hide that fact. (It’s also not an excuse to talk about your kids all night, or whip out the photo album!) 8. Don’t be shy about sharing ‘non- professional’ things. You might find that the person you’re speaking with also has a passion for skydiving. 9. Be interesting 10. Be interested 11. Be gracious. No looking over a person’s shoulder to see if someone more interesting arrived 12. If you see someone who’s alone, invite him/ her to join your conversation 13. Be succinct. Interactions should be short and sweet 14. Don’t monopolize someone (or let them monopolize you). I find that in either situation, simply saying “I don’t want to hog you all night, it’s been great meeting you” will do the trick. 15. Be OK with being uncomfortable. It’s a rare person who can walk into a room full of strangers and be totally at ease. 16. Be kind to yourself. Sometimes it goes better than others and that’s OK 17. Dress the part 18. Smile, Smile, Smile 19. Pay attention to your posture. Shoulders back, chin up and make sure nothing’s crossed 20. Shake hands when you introduce yourself and again when you exit saying ‘it was nice meeting you’ (sounds basic, but lots of people don’t do it!) TIPS & STRATEGIES
E F F E C T I V E M AY 1 5 , 2 0 1 7 : NYC Freelancers & Businesses Must Comply With The Freelance Isn’t Free Act The Freelance Isn’t Free Act provides basic protections for freelance work, including: MANDATORY CONTRACTS Freelance agreements for over $800 of work during a 4-month period must have a contract outlining the scope of work, rate, method of payment, and the payment due date. 30-DAY PAYMENT TERMS Payment must be received within 30 days of work completion, or by the due date specified in the contract. PAYMENT AGREEMENT PROTECTIONS Clients cannot require that freelancers accept less than the contract stipulates in exchange for timely payment (ie: “We can pay you faster, but only if you accept less.”). CONTRACT RESPONSIBILITY The burden of having a contract falls on the client – not the freelancer. Clients can face a $250 penalty if they refuse to provide a contract. ANTI-RETALIATION Clients cannot retaliate against freelancer for pursuing payment. IF NONPAYMENT OR LATE PAYMENT OCCURS: Freelancers must be paid within 30 days of submitting work or the payment due date, as stipulated in the contract. If payment is not received or is received in an untimely fashion, then freelancers may take the following actions: • File a court action and litigate against non-paying clients • If the court rules in the freelancer’s favor, the judge may award the freelancer: • Double Damages: the client will owe the freelancer twice the assessed damage. • Attorney fees: Judges may hold the client responsible for the freelancer’s attorney fees • No contract fee: Clients can face a $250 penalty if they refuse to work with a contract • Civil penalties: Clients with multiple judgements against them may also be subject to civil penalties up to $25,000. • File a complaint with the Office of Labor Policy and Standards
The checklist above is not intended to convey or constitute legal advice. Freelancers Union will happily refer you to a lawyer who can help you demystify the process of getting paid and point you in the right direction. Email advocacy@ freelancersunion.org for more. #FreelanceIsntFree | FREELANCERSUNION.ORG Ready to schedule a consultation with a lawyer, or head to small claims court? Use this checklist and story outline to gather the details of your case and prepare your evidence for review. Need help finding a lawyer? Download the Freelancers Union app to connect with a lawyer committed to helping freelancers and who understand the freelance life. PART TWO: THE FACTS I am owed $ It took me hours / days / months (circle one) to complete the agreed-upon work The agreed-upon payment was $ I was paid $ by: W-2 / 1099 / cash / check / direct deposit / other My client’s name / the name of my client’s business is My client can be found online via PART THREE: THE PLAYERS I can name other freelancers who have been stiffed by this client I believe these freelancers would be willing to describe their cases I believe this company may be politically vulnerable, and I can offer reasons why PART ONE: THE PROOF I have a signed contract I have an email exchange in which terms were offered and accepted I have a signed statement of work I have alternate proof of correspondence: I have (at least 2) copies of all of these documents GATHERING THE EVIDENCE: HOW TO PREPARE YOUR CASE FOR REVIEW
In the space below, describe your nonpayment story in greater detail. (You may also type out your story on a separate page, so long as it does not exceed one page, double-spaced). Please be sure to include: Date the project began Tasks performed/deliverables created Dates any payment was received Amount owed and why NONPAYMENT STORY DETAILS
Samaschool Proposal Templates Below are a few proposal templates you can easily customize, copy, and paste. Remember, you can also use the Proposal Generator if you’d prefer. Template 1: Proposal with portfolio links Hi [client name], My name is [your name], I specialize in [your work category/specialization] for [your target clientele/who you specialize in serving]. Please take a look at my [website/portfolio] to view examples of my work – [link] You'll notice that I [something that makes you stand out]. I'd be happy to arrange a call if you'd like to talk through your requirements in more detail. Best, [your name] Example: Hi Emily, My name is Jesse, I specialize in building responsive WIX websites for small businesses and nonprofits. Please take a look at my website to view examples of my work – www.jjbwebdesign.com.
You'll notice that I favor a clean, modern aesthetic that I think would work well for your needs. I'd be happy to arrange a call if you'd like to talk through your requirements in more detail. Best, Jesse Template 2: Proposal with NO portfolio Hi [client name], **if client name is not available, use “Hi there” My name is [your name], I specialize in [your work category/specialization] for [your target clientele/who you specialize in serving]. You’re looking for a [job role or job description], which is exactly what I specialize in. I’ve been doing [job role or job description] for [amount of time], and always make sure to [something that makes you stand out]. Please let me know if you have any questions, I’m happy to talk through your requirements in more detail over messaging or a video call. Best, [your name] Example: Hi Emily, My name is Jesse, I specialize in building responsive WIX websites for small businesses and nonprofits.
You’re looking for a web designer, which is exactly what I specialize in. I’ve been designing websites for more than three years, and always make sure to work with my clients to understand their business objectives to ensure quality results. Please let me know if you have any questions, I’m happy to talk through your requirements in more detail over messaging or a video call. Best, Jesse Template 3: Comprehensive Proposal This proposal is borrowed from www.fulltimenomad.com, a great site with lots of useful information for online freelancers. Hi [client name], **if client name is not available, use “Hi there,”** Thanks for inviting me to submit a proposal. **Start with this only if you have been invited to apply for a job. Otherwise, start below.** You’re looking for a [job role or job description], which is exactly what I specialize in. Talk about a perfect match! I’ll keep this short and we can go into more detail when we chat. Before anything else, I know you’re probably curious to see my work. Please have a look at my portfolio: [insert link to portfolio]. Alternatively, you can also view samples of my work here: [insert link to website or other online portfolio].
As you can see from my samples, I enjoy working with clients who [insert statement about taking your niche of work seriously]. I took the time to check out your website and you certainly fit the bill **insert this statement only if applicable and you have actually been able to review the website. If possible mention something specific about their business of website so it proves you actually have taken the time.** Before we start working together, I will [insert statement about how you work that demonstrates your professionalism]. Finally, to answer the questions in your job post… **insert this statement only if the client has asked questions within the job post** I’d love to chat with you over Skype to see if we’re a good fit for each other. I’m available [insert exact days, so there is no confusion] between [times you are available + insert time zone]. My Skype ID is: [insert Skype ID]. I look forward to our chat. Have a great day! Thanks, [your name] Example: Hi David, Thanks for inviting me to submit a proposal. You’re looking for a graphic designer for your advertising and marketing materials, which is exactly what I specialize in. Talk about a perfect match! I’ll keep this short and we can go into more detail when we chat. Before anything else, I know you’re probably curious to see my work. Please have a look at my portfolio: link to portfolio Alternatively, you can also view samples of my work here: link to website
As you can see from my samples, I enjoy working with clients who take good design seriously. I took the time to check out your website and you certainly fit the bill. Before we start working together, I will review your existing design assets, discuss software specifications and interview you about your visual brand. I will also explain my process, my design personality and creation timelines. Finally, to answer the questions in your job post, I work on a mac with CC 2017 Adobe software. I’d love to chat with you over Skype to see if we’re a good fit for each other. I’m available next Tuesday (9/5) and Wednesday (9/6) between 9am and 5pm PST. My Skype ID is: [insert Skype ID]. I look forward to our chat. Have a great day! Thanks, Jesse
Creative freelancers need to be extra-vigilant about how clients use their work. Just because a client has paid for the work doesn’t mean they are free to sell, reproduce or alter the original. Creative freelancers must determine in what ways we’re comfortable allowing our work to be used or altered – and then put those guidelines in a contract. Limited use contracts allow creative freelancers to retain control over their work while granting clients license to use the work in certain ways for specific amounts of time. If you plan to use the work yourself, your contract should clearly specify this. Most templates, like this one by Freelancers Union, provide the basics of an enforceable agreement. What is the work being completed? Where and how can it be used? For what length of time? Is the license exclusive, or can you license the same work to others? Can your client modify your work or create other work based on it? Is the client required to credit you with the work? Need help dealing with a legal issue? Download the Freelancers Union app to connect with a lawyer committed to helping freelancers and who understand the freelance life. Click here to download a Word version of this agreement. Additional contract clauses can be accessed via our “Next Level Contract Clauses” resource. D E S I G N , P H O T O , A N D / O R V I D E O LIMITED USE CONTRACT TEMPLATE
1. AGREEMENT This Agreement by and between freelancekit (the “Producer” or “Primary Producer”) and [CLIENT] (“Client” or “[Another Name]”) is made and entered into as of the last date signed by one of the parties below (the “Effective Date”). Producer agrees to perform the Services and provide the Deliverables as described herein, and Client agrees to pay Producer the compensation as described herein. Deliverables include production of ______________ ___________________________. 2. SERVICES & DELIVERABLES The Services to be provided by Producer for projects include [designing web content], producing [video footage] [designs] [photography] and other media for use in creating the Deliverables. The Deliverables are the work product of the Services. Producer may hire or subcontract with other individuals or entities at will without consent from Client in the creation and provision of Services and Deliverables. Deliverables include production of ___________________________________________. 3. LIMITED RIGHTS ON PROJECTS Client shall have limited usage copyrights to all copyrightable Deliverables developed by Producer, solely or in collaboration with others, during the term of this Agreement and arising out of or in connection with performing the Services under this Agreement, subject to receipt of payment for the compensation as defined in section 4 “Compensation for Projects.” Limited usage includes permission to share the [web content, video footage, designs, photographs] on Client’s [website, social media, at conferences, trade shows, for internal or external marketing use] both in whole or partially, and in their original form or any altered state. The Client must obtain written permission from Producer prior to selling the [photographs, video, design]. If client desires unlimited usage (i.e. usage in a national TV/Radio ad campaign), a new contract will be created to reflect those desires. Producer shall retain the right to use any future productions in promoting itself and services. In consideration of the promises between the parties as referenced herein, the parties agree as follows: PRODUCER freelancekit Street Address City, State 12345 CLIENT Client 123 South Ave City, State 12345 LIMITED USE CONTRACT TEMPLATE D E S I G N , P H O T O , A N D / O R V I D E O
4. COMPENSATION ON PROJECTS To obtain limited usage rights as described in section 3 “Limited Rights on Projects” for all finished projects, Client agrees to pay Producer $_______________ for performed Services. Producer requires 50% upfront on signing of contract. 25% is due upon delivery of first rough draft edits for client review and than the last 25% upon completion of all performed Services. 5. CONFIDENTIALITY Each party agrees that the terms of this agreement are confidential. 6. SEVERABILITY If any term of this Agreement is found to be unenforceable or contrary to law, it will be modified to the least extent necessary to make it enforceable, and the remaining portions of this Agreement will remain in full force and effect. 7. TERM AND TERMINATION a. Term of Contract: Term shall commence on the [Effective/Start Date] and continue until such time as Producer notifies Client in writing that the project is complete. b. Upon termination of this Agreement by Client without Provider’s fault or consent, Client shall pay Provider, in addition to all of the fees earned by Provider pursuant to the term, an early termination fee equivalent to 40% of the total remaining fees payable to the Provider, plus any and all expenses and third-party costs reasonably incurred by Provider through the effective date of the termination. If Client desires to terminate this Agreement due to Provider’s fault, Client shall give Provider written notice detailing the nature of Provider’s fault and the Provider shall have a reasonable period of time (but in no event less than 30 days) to cure such fault. Termination by Client without providing the foregoing notice and cure period shall be considered termination without Provider’s fault, as described above. c. If Client commences any legal action against Producer during the term of this contract, Producer shall have the right to terminate this agreement at its absolute and sole discretion. 8. INDEMNIFICATION Client agrees to indemnify Producer, and any of its respective successors, licensees, and assigns, from any and all losses, costs, liabilities, damages, and expenses (including reasonable attorney’s fees) resulting from any breach by Client of any representation, warranty, and covenant under this agreement. Client will defend the Producer against any and all claims, liability, damages, and costs, including legal fees & expenses, arising out of the use, or misuse, of the Deliverables.
9. NATURE OF RELATIONSHIP a. This agreement is one of an independent contractor and does not constitute any type of partnership, joint venture or similar undertaking as between the parties. b. Client shall not provide Producer or any of his/its employees or agents unemployment, medical, disability, workmans comp or retirement, or be responsible for any local, state or federal taxes. A 1099 will be issued to Producer as an independent contractor under FEIN ____________, and he shall complete an IRS W-9 form to verify the same. 10. COLLECTIONS Client agrees to pay all reasonable attorney’s fees and or other fees or costs if the account is placed with an attorney for collection. 11. FORUM & CHOICE OF LAW This agreement shall be governed by the laws of the State of __________________. Any complaint shall be commenced in the Circuit Court of _________________ County, ________________ and only that court shall have exclusive jurisdiction over this Agreement. 12. NEUTRAL CONSTRUCTION This Agreement is the result of negotiations between the parties, none of whom have acted under any duress or compulsion, whether legal, economic or otherwise. Accordingly, the parties hereby waive the application of any rule of law that otherwise would be applicable in connection with the construction of this Agreement that ambiguous or conflicting terms or provisions should be construed against the party who, or whose attorney, prepared the executed agreement or any earlier draft of same. Unless the context of this Agreement otherwise clearly requires, references to the plural include the singular and the singular, the plural. The words “hereof,” “herein,” “hereunder” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision. The section titles and other headings contained in this Agreement are for reference only and shall not affect in any way the meaning or interpretation of this Agreement.
PRODUCER SIGNATURE TITLE PRINT DATE CLIENT SIGNATURE TITLE PRINT DATE IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives: This contract template addresses many of these questions, and should help you build a solid foundation to protect your business and your work. It is not intended to convey or constitute legal advice. Please consult a lawyer when creating a contract to ensure it is uniquely suited to your business. Need help finding a lawyer? Download the Freelancers Union app to connect with a lawyer committed to helping freelancers and who understand the freelance life.
freelancers union 2017/2018 HEALTH INSURANCE GUIDE Step-by-Step Guide to Choosing the Best Plan for You Picking a new health insurance plan may seem daunting, but it doesn’t have to be. Here are 6 things to take into consideration before you start the shopping experience.
Make a list of the things that you feel are vital to your healthcare plan. Be sure to consider your medical and financial needs. Review the costs associated with health insurance plans First, familiarize yourself with the terms: • Copay: A fixed dollar amount that you pay out of pocket for a medical expense. • Premium: What you pay each month in order to purchase insurance. This is, roughly, the “cost” of your plan. • Coinsurance: The percentage of a medical expense that you are responsible for paying. The insurance company pays for the rest, hence “co-insurance.” • Deductible: The amount you are responsible for paying towards medical expenses before your insurance coverage “kicks in” to pay the rest. This resets every year. • Maximum out-of-pocket: The maximum amount you will be responsible for paying toward medical expenses covered on your plan. The overall cost of your health insurance plan is typically a combination of the various pricing factors listed above. For example, plans with higher premiums (monthly payments) will frequently have lower copays and deductibles. If you expect to have a lot of medical appointments in the next year, you may want to sign up for a plan with a higher premium and lower copays. 1 2 2
Check prescription drugs coverage and cost Each plan has a Prescription Drug List of covered medications. The medications are grouped into tiers based on cost. Some plans will have lower cost thresholds than others. Check the Prescription Drug list associated with the plans you’re considering to determine whether your medications are covered. Access to doctors and care facilities Every plan has a network of providers, which includes doctors and care facilities as well as labs, pharmacies, and imaging centers. If your regular doctor is not in the network of your plan, it’s likely to cost you more to visit. Be sure to call your doctor before switching plans to confirm that they will take your new insurance. If you don’t have a regular doctor, it’s still important to evaluate the network based on travel times and location as well as peer reviews of the care providers within the network you’re considering. Don’t be afraid to make a call to better understand the scope of your network! Plan limitations and exclusions It’s important to know what your plan does not cover. Elective surgeries and alternative therapies are commonly excluded from most health care plans. Many health plans do not cover care provided by someone who is not in their network. Dental and vision services typically need to be purchased on separate insurance plans. 3 4 5 3
Health and wellness resources Some plans offer rebates for various health clubs and facilities. It’s a perk, but if you’re deciding between two plans, it might make all the difference. Don’t be afraid to make a call to better understand the wellness benefits included with your coverage. When you buy health insurance through Freelancers Union, a portion of your purchase goes right back to the freelance workforce – at no additional cost to you. Shop health plans handpicked by our experts now. Some plans offer rebates for various health clubs and facilities OR COVER WELLNESS CARE LIKE ACUPUNCTURE. 6 4 Buying health insurance doesn’t have to suck. Buy insurance from people who have your back at https://freelancersunion.org/benefits
EIN TAX NUMBER WHY EVERY FREELANCER SHOULD HAVE AN EMPLOYER IDENTIFICATION NUMBER freelancers union TAX RESOURCES With each new gig, it’s likely that your employer will ask you to fill out a W-9 for tax purposes. This is a good sign – it means that your employer is trying to be on the right side of the tax laws – but it also means that every time you’re filling out a W-9, you’re giving away a lot of personal information including your Social Security number. Your clients may be scrupulous, but that doesn’t mean that everyone who comes across their desk is – and if your information gets in the wrong hands, you could become a victim of identity theft. An easy way to protect yourself is to apply for an Employer Identification Number with the IRS. You can use their form between 7 a.m. and 10 p.m. ET Monday through Friday to apply. HERE’S WHAT YOU NEED TO KNOW BEFORE YOU APPLY: • You will apply as a Sole Proprietor • If you’ve already incorporated your business or be- came an LLC, then this will not be applicable to you • You will need to provide your name, address, social security number, and start-date as a sole proprietor The application takes less than 10 minutes. The IRS will send you an EIN as soon as they verify your information. Voila! Moving forward, you can enter your EIN rather than your SSN. While you must continue to remain savvy about your partnerships (business identity theft is a thing, too), an EIN can go a long way to preventing identity theft.
FIRST-TIME FREELANCER’S GUIDE TO TAXES freelancers union TAX RESOURCES
ORGANIZING & PREPARING The first rule of managing your taxes as a freelancer is to get organized. Meticulous records and deep knowledge of your business finances can make a big difference on your tax bill. Today, we have access to a variety of book and record keeping softwares. We recommend a tool like Freshbooks, a cloud- based accounting solution designed with the freelance lifestyle in mind. Freelancers Union members can access an exclusive discount here. Ideally, your organization methods should lay the groundwork for smooth tax preparation – it doesn’t help if you try to get organized a few days before filing! Most importantly, be sure to keep track of the following: 1. Your business income It sounds obvious, but when you’re juggling multiple gigs and receiving invoices from a number of clients, it can be difficult to keep track of how much has actually gone into your bank account. You will only receive 1099’s from clients from whom you made upwards of $600, so if you’re doing many small jobs, you’ll need to be able to report that income yourself. 2. Your business expenses Again, it sounds like a no-brainer, but when you’re in the zone and have to rush out for more printer paper, you may forget to notate the expense. But, deductions can alleviate some of the hefty tax payments freelancers make, so it behooves you to keep receipts from all of your business expenses for at least 6 years. Be sure to include deductibles like: • Advertising expenses like business cards, online ads, website subscriptions and other tools used to promote yourself and your business • Business insurance • Interest paid on your business credit card or business loans • Lawyer fees and other professional services • Rent or dues on a workspace – if you work from home, be sure to keep up-to-date pictures or a floor plan of your home office space • Repairs for your computer, camera and other business-related equipment • Routine office supplies like pens, paper, staples, etc. • Travel costs like plane and train tickets related to business purposes • Business meals with clients and other entertainment reasonable for your business
See our Deductions Guide to determine what business expenses you’ll be able to use to offset your tax bill. Find your tax professional Now that you’ve developed a system for keeping track of business income and expenses, it’s time to start looking for the right tax professional. While some freelancers may prefer to do their own taxes, we do recommend engaging the help of an expert. • A CPA with experience helping freelancers with taxes can: • Help you save on tax fees • Reduce the amount of time you spend on taxes • Make you less susceptible to an audit Like all freelance relationships, it’s important that you find a CPA with whom you have good rapport and feel comfortable allowing into your financials. Trust is imperative in this relationship – and you need to be able to be honest with your tax professional. FILING & PAYING YOUR TAXES By the time you reach tax-paying time, you should have an itemized and organized record of your earnings and expenses. It’s easy to go cross-eyed just looking at a tax form, but if you’re prepared the process can be relatively painless. Pay quarterly estimated taxes If you’ve ever worked full-time, your taxes are automatically withheld from each paycheck. As a freelancer, you’re responsible for doing this on your own by paying quarterly estimated taxes. Use IRS form 1040-ES to file your estimated taxes. As you’ll pay approximately 15.3% of your income every quarter, it’s helpful to open a savings account wherein you reserve at least ⅓ of your income specifically for tax purposes. The Electronic Federal Tax Payment System makes this process a little bit easier.
The schedule for estimated taxes is: • For income received Jan. 1 through March 31, estimated tax is due April 18. • For income received April 1 through May 31, estimated tax is due June 15. • For income received June 1 through Aug. 31, estimated tax is due Sept. 15. • And for income received Sept. 1 through Dec. 31, estimated tax is due Jan. 17. Do not assume that you will be able to pay all your taxes at the end of the year in one lump sum – failing to pay your quarterly earnings will result in fines and penalties. Furthermore, if you miss a quarterly tax deadline, file as soon as possible and speak with an IRS representative about appealing the penalty. Do not wait until the next period to pay. IS INCORPORATION RIGHT FOR ME? Incorporating into an LLC or an S-Corp may make tax season a little bit easier, but there are still benefits to remaining a sole proprietor. See our guide on incorporation to determine whether or not this is the next step for your business. FORMS TO KNOW FORM W-9 Your client may ask you to fill out a W-9 when you take a job. Usually, this just means inputting your name, address, Social Security Number and possibly a tax identification number. FORM 1099 If you make more than $600 on a given project, your client should send you a 1099 before the tax filing deadline. It’s simply a summary of the money they’ve paid you, which is the amount on which you will pay taxes. If you were paid less than $600, or if you did not receive a form from your client, you must still report that income on Form 1040. See our guide on Reading Form 1099.
FORM 1040 Because you are reporting self-employment income, you will use the original 1040 form to report your annual income. If you have a fairly simple freelance business, use Schedule C-EZ to report your income. This form is appropriate if: • Your business expenses are less than $5000 • You have no employees • You have no physical inventory • You are not using depreciation or deducting the cost of your home If your business is more complex, you should use the Schedule C form. Schedule C has 5 parts in which you’ll be required to calculate your gross profit, your net profit (your earnings minus your expenses). Additionally, you will have to complete Schedule SE Form – or the self-employment tax form. This also applies if you have an LLC. This form will determine how much you pay in Social Security and Medicare taxes. This is a tax you must pay on top of your income tax. Finally, if you made any capital gains from a sale or trade the previous year, you will need to complete a Schedule D Form and the additional Form 8949. Capital assets include personal property such as your home, car, artwork and collectibles. It also includes investment assets such as stocks and bonds. If you sell a capital asset for gain, you need to report it on Schedule D. Form 8949 should be filled out first and will require a more detailed report of the trade or sale. Disclaimer: This is meant as a guide, not professional advice. If you have any questions about your taxes or your deductions, hire an accountant or ask a tax professional.
If you’re self-employed or picked up a couple freelance gigs totaling more than $600 in income, your clients should send you a 1099-MISC tax form. Use this annotated guide to determine how to prepare your 1099-MISC form for submission to the IRS. HOW TO READ A 1099-MISC TAX FORM freelancers union TAX RESOURCES
If a client pays you rent for office space or equipment, it will be reported it in Box #1. Only payments exceeding $600 need to be reported here. If a client owes you royalties exceeding $10, they will be reported in Box 2. Royalties cover license fees for copyrights, patents and trademarks. This is where your client will report “Nonemployee compensation,” ie: how much they’ve paid you for the work you agreed to do. If you’re submitting taxes online, all you have to do is input the information in your 1099-MISC and, if you’re submitting taxes via a tax professional just turn your 1099s over to them. 1 2 7 1 2 7
1099-MISC FACTS Who will send me a 1099-MISC? You should receive a 1099-MISC if you earned over $600 from a single client or employer. Your client or employer is responsible for sending you the 1099-MISC. Even if they don’t, however, you’re still responsible for reporting this earned income. What if I have an LLC or Corporation? If you’ve set up an LLC or Corporation, the payor is not required to issue a 1099-Misc form to a corporation. If your LLC is a single owner, you will use Schedule C on your 1040 tax returns. If your LLC is designated as a partnership, you will use Form 1065 for informational purposes and report all income, deductions and credits on a Schedule K-1 form. If you make a corporate tax election for your LLC, the IRS will treat your business as a separate taxpayer. Thus, the business itself is responsible for reporting income and deductions on Form 1120. What if I got a 1099-MISC but shouldn’t have? When your client submits a 1099-MISC, it also goes to the IRS. This means, that the IRS will be expecting you to report it on your taxes. If your client sent you a 1099 in error, you will have to ask them to resubmit a “corrected” 1099 with ‘0’ for the amount and also re-submit a Form 1096 summary sheet, which is the form they submit to transmit their 1099’s to the IRS. What if I never receive the 1099-MISC? Because you must file and pay your estimated quarterly taxes on the 15th of January, April, June, and September, you should receive your 1099s from your clients on a quarterly basis. If you do not receive your 1099 by the 31st of the prior month, you should get in touch with your client – it’s possible it went to the wrong address. In any case, you must report the income whether or not you receive a 1099. Do I need to file a 1099-MISC if I’ve hired other freelancers to work for me? Yes – file a 1099-MISC to report any payments over $600 made to independent contractors that you’ve hired. Disclaimer: This is meant as a guide, not professional advice. If you have any questions about your taxes or your deductions, hire an accountant or ask a tax professional.
SALES AND USE TAX FACT SHEET freelancers union TAX RESOURCES BY JONATHAN MEDOWS CPA
As a freelance professional, the burden for ensuring you are in compliance with all tax regulations falls squarely on your shoulders. One area of taxation that is often misunderstood by those who are self- employed are the rules applying to sales tax and use tax. Sales tax: Applies to retail sales of certain tangible personal property and services. Use tax: Applies to purchases of tangible personal property and services that are made outside of the state in which they will be ultimately used. Here are some facts about sales tax and use tax to help you determine how you should handle these obligations as they apply to your freelance business. FACT #1: SALES AND USE TAX REGULATIONS VARY BY STATE. Every state has different requirements for sales tax and use tax. For example, in New York State the assumption should be that goods being sold are taxable unless they are specifically exempt in the state’s regulations. If you sell physical goods and ship them to someone in your same state, then you have to collect (charge the buyer) sales tax and pay that tax to your state. However, if you ship these goods to another state where you do not have a tax nexus (see the explanation of tax nexus below) you do not have to collect sales tax on sales where goods are delivered to an out-of-state address. For professional services, it is generally safe to assume that your sales are tax-exempt unless your state’s regulations rule otherwise, but it is still a good idea to double check and become familiar with the sales tax regulations of the state(s) in which you do business. FACT #2: FREELANCERS SHOULD DETERMINE THEIR TAX NEXUS AND RESPONSIBILITIES. From a tax perspective, nexus means that your business has established a presence in an area. Your nexus may be based on your business presence in a state, however, in some states you have to register by county or city. You can have a direct presence by having a store location in a state, hold inventory within a state, or by living or working in a particular jurisdiction. You can also have a presence through a representative in a particular area. You may also be considered as having a tax nexus if you have affiliates in a state that you work with to sell your goods.
FACT #3: THE TYPE OF PRODUCT OR SERVICE YOU OFFER MATTERS WHEN IT COMES TO SALES TAX. For many freelance professionals, especially those working in the programming and website development industry, the line between what is considered a tangible good and what is considered a service for the purpose of charging sales tax can be quite fuzzy, unless you are a tax professional. As a rule of thumb, digital work that produces a tangible output such as pre-programmed, non- customizable software is usually taxable. Work such as website development that produces downloadable electronic files or the ability to download files may be subject to sales tax (again, depending on the state in which the sale is being made), but website maintenance would generally be considered a service on which sales tax would not apply. Conversely, providing maintenance services for computer hardware in some jurisdictions (such as New York) is taxable. Freelancers should consult with a tax professional regarding how sales tax should be applied to their specific product and service offerings. FACT #4: FREELANCERS MAY NEED A SALES TAX PERMIT. Most states require you to register for a sales tax permit or license for your business if you intend to engage in the sale of goods or services which require you to collect sales tax and/or use tax. The permit allows you to charge sales tax on your customers’ purchases so you can collect the necessary amount for which you will owe when completing a sales tax return. To register for a sales tax permit, you typically file an application through the department of taxation in your state. After you file the application and are approved, the state issues your business a certificate including a sales tax identification number. FACT #5: A SALES TAX EXEMPTION CERTIFICATE MAY HELP FREELANCERS RELIEVE THEIR RESALE TAX BURDEN. A sales tax exemption certificate can exempt you from having to pay sales tax on an item that you are going to resell. To obtain a certificate, a purchaser must first apply for and be granted one by their home state’s tax authority and provide the required information to sellers they are purchasing resale items from. The seller can then sell property or services to the purchaser without charging sales tax. However, this type of certificate is generally used when the end good is sold and subject to sales tax. There are very specific rules as to when sales tax exemption certificates can be used. You should also keep in mind that when it comes to sales tax exemption certificates there are usually very specific regulations about what type of purchaser may use the certificate. In addition, most sellers must have a valid Certificate of Authority in order to accept an exemption certificate. A properly completed
exemption certificate accepted in good faith protects the seller from liability for the sales tax not collected from the purchaser. Each state will have its own rules about the use of sales tax exemption certificates. For example, in New York, sales tax exemption certificates of other states or countries are not valid to claim exemption from state and local sales taxes. FACT #6: USE TAX RETURNS ARE APPLICABLE TO FREELANCERS, BUSINESSES AND CONSUMERS. Use tax is owed when someone buys a good that is taxable outside of the state where the item will be used and either sales tax was not collected by the retailer in the selling state or the rate of sales tax is lower than the sales tax in the home state. For example, if Joe, a New York-based freelancer buys a hard drive from a company that does not have a tax nexus in New York and the company ships the item to Joe, the item will be taxable in New York and Joe will owe use tax on it. Another example: Jane, who lives in New York, buys a computer in New Jersey, and is subject to the state’s sales tax which is lower than that of New York State. Jane owes a use tax equivalent to the difference between the tax rates of New Jersey and New York. The requirement to pay use tax applies to freelancers, consumers and businesses. States such as New York allow individuals, in lieu of filing a use tax return, to pay use tax based on a percentage of their personal income. However, this only applies to their personal, non-business purchases and, theoretically, an individual who is a freelance professional would still be subject to filing a use tax return for business purchases. FACT#7: FREELANCERS WHO CHARGE SALES TAX MUST FILE A SALES TAX RETURN. Like use tax returns, freelance professionals (as well as individuals, sole proprietors, and LLCs) who collect sales tax must file sales tax returns with their state’s tax authority. The reporting times and frequency vary by each state. It is advisable to check with a tax professional familiar with your local tax regulations for guidance on this area. Disclaimer: This is meant as a guide, not professional advice. If you have any questions about your taxes or your deductions, hire an accountant or ask a tax professional. Jonathan Medows is a New York City based CPA who specializes in taxes and business issues for consultants across the country. His website, www.cpaforfreelancers.com, has a resource section with how-to articles and information for freelancers.
TAX DEDUCTIONS OVERVIEW freelancers union TAX RESOURCES
As a freelancer, your taxes can get pretty complicated. Welcome to the labyrinthine world of deductions! Even if you have an accountant prepare your taxes, it’s still a good idea to know what’s possible so you can make sure you’re keeping track of the right expenses. Below is a very basic overview of some of the business deductions freelancers typically take. FORM 1040, SCHEDULE C Most deductions are filed using Schedule C. Let’s go through it step by step, skipping to Part II. Line 8: Advertising. This includes any advertising and promotional costs like print or online ads, business cards, brochures, and give-away items with your or the company’s name. Include here also any sponsorships like an ad at your local walkathon. Line 9: Car and truck expenses. You have two options here. Option 1: Multiply the number of business miles you drove this year by 57.5 cents. (Do not add up the money spent on gas this year.) Then add this amount to your parking fees and tolls. Enter this on Line 9. Option 2: Fill out form 4562, Section B. This allows you to itemize gas, repairs, insurance, depreciation, etc. For a more thorough guide on auto and mileage deductions, please see our Auto and Mileage Deductions Guide. Line 10: Fees and commissions. These vary by locality and state, but if you’re a creative freelancer (artist, photographer, writer, designer, etc.), you probably will leave this blank. It covers medical licenses, business, and inspection fees. Line 11: Contract labor. Include on this line the total you spent on other independent contractors or freelancers for your business. This includes the college student you paid to help organize your office, the computer guy who helped set up your laptop, or the designer you paid to make your business cards. Contract labor includes any labor you did not treat as an employee. If you include this on Line 11, do not include it in any other place on Schedule C. Accountants and lawyers go on Line 17, and if the contractor repaired your existing business equipment, include that on Line 21. Line 12: Depletion. Unless you work in a mine or quarry or pine grove, leave this blank. Line 13: Depreciation. This one can be important for freelancers who use expensive equipment for
their business, like cameras and lighting gear, but also for any freelancer with a laptop. Most freelancers get to depreciate their equipment over five years (computers, camera equipment, fax machines, etc.) or seven years, depending on the life of the item. Some qualifying businesses can also take an exception that allows them to write off the entire cost of the product in the first year the equipment was used. Line 14: Employee benefit programs. For businesses with employees. Doesn’t apply to most freelancers. Line 15: Insurance (other than health). Premiums you paid for various types of business insurance are deductible here. This includes liability insurance, malpractice insurance, workers’ compensation insurance, and fire, storm, accident, flood, theft, and other insurance covering your home office. Line 16: Interest. If you took loans this year for your business, this is an important section. Put the interest you paid on your loans this year in Line 16. Also include interest you paid on credit card debt. This will be easier if you have a separate credit card for business expenses. Line 16a allows you to itemize mortgage interest -- but only on the percentage of your home that qualifies as a home office -- see line 30 for more details. Line 17: Legal and professional services. The cost of lawyers to set up your business or for litigation and the cost of any accountants. Include tax preparers, but only for the portion of your taxes related to your business (yes, this can be hard to determine -- ask your accountant). Line 18: Office expenses. This includes things like office supplies and postage. Materials, books, pens, printer paper, and “professional instruments” all apply here. Just total up your receipts and put it on Line 18. Line 19: Pension and profit-sharing plans. Only applicable if you have employees, and they have pension plans, etc. Most freelancers should leave this blank. Line 20a: Vehicles, machinery, or equipment. Only applicable if you leased a car or professional equipment. Again, might be applicable to freelance photographers who lease instead of buy. May also include software that you lease (like some versions of Adobe Creative Suite). Line 20b: Other business property. If you rent an office or other space, include that here. Line 21: Repairs and maintenance. If any of your equipment broke and you had it repaired, include that here. For freelancers, this would most commonly be if your computer broke and you had to repair it. Line 22: Supplies. Only applicable if you produce a physical product. If you sell journals on Etsy, the cost of paper and leather may go here. Do not include your inventory. (Leather for a journal seller = supplies, leather for a leather store = inventory.) Line 23: Taxes and licenses. You can deduct the following taxes, according to the IRS:
• Real estate taxes on your business property. If you have a home office, you can deduct a percentage of your real estate taxes on your home. To calculate that percentage, see Line 30. • Federal unemployment tax • State and local taxes “imposed on you as the seller of goods or services” -- but only if you didn’t already collect them from the buyer, which you should put on Line 1. Line 24a: Travel. If you travel for business -- like staying overnight or being away from home significantly beyond a normal workday -- you can deduct a few of your expenses. This line should include transportation and accommodation. Remember, these expenses should only be included here and not also on Line 9. The IRS does not smile on double counting transportation costs. If you’re traveling for pleasure and for business, you may only deduct the portion of your travel expenses corresponding to the portion of your trip relating to business. For instance, if you stay an extra day just to sightsee, that day’s expenses -- including meals and lodging -- would not be deductible. Line 24b: Deductible meals and expenses. There are very complicated rules for this, listed here. Here’s a short version of how to determine what qualifies: • It has to be an “ordinary expense” that’s “common and accepted” in your profession. • It has to be a “necessary expense” that’s “helpful and appropriate” to your business. • It was “directly related,” so it happened in a business space, or the primary goal was to do business or for a particular business outcome. Note: this does NOT mean that you have to prove that income resulted from every business meal. • “Lavish or extravagant” expenses don’t qualify. It has to be “reasonable” in the course of business. I.e., taking your clients with you on a cruise to Tahiti may not qualify. Line 25: Utilities. If you have a separate office away from your home, deduct 100% here. If you have a home office, you can deduct the percentage of your utilities equal to the percentage your home office takes up in your home overall. To calculate this percentage, see Line 30. • Phone: If you only have one phone line installed at home, you can’t deduct the cost of that line, but you can deduct long-distance business calls you make on that line. If you add a second line for your business, that line is fully deductible. If you only use your cell for business, you need to calculate the percent you use it for business vs. personal use, and then deduct only the business percentage. • Heating/Electricity/Gas/Water: Again, only the percent corresponding to your home office. • Internet: The cost of building, maintaining, and hosting your website or portfolio can be included here, as well as purchasing the domain name. If you also use your Internet for personal use, deduct a percent of your monthly Internet bill. Line 26: Wages. Only applicable if you have employees. Line 27a: Other expenses. All the stuff that didn’t fit anywhere else. These need to be itemized
in Section V of the same form. If you sell products on services like Etsy or Paypal, you can deduct transaction fees in this section. Line 30: Home office. This one can be a doozy, but it’s often worth it. In order to deduct home office expenses, your office has to be your primary business space “exclusively and regularly.” Whether a full room or a designated area of one, the office space shouldn’t be used for any other purpose and there should be no other office where you can work (such as a rented space you’re already deducting). In short, you need to answer “yes” to one of the following: • You do most or all of your work there • You meet clients there frequently • There’s a separate structure on your property that you use only for business • You’re using your home to store product samples or inventory • You operate an at-home day care center for children, the elderly, or people who can’t take care of themselves. The deduction is calculated in one of three ways. It might be worthwhile to test all three to see which gives you the greatest deduction. #1: By square footage. First, measure the size of your office and then calculate what percentage your office takes out of your whole home/apartment. For example, if your office area is 200 square feet and your house is 2,500, then you can deduct 8% of your indirect household expenses. So let’s say that all together, indirect expenses in your home are $15,000 a year. Because your office takes up 8% of your home, you’ll be able to deduct 8% of $15,000, or $1,200. #2: By rooms. You can also try to calculate this percentage based on rooms. If your office is one room out of 8 in your home, or 12.5%, this would give you a higher deduction. #3: $5 per square foot. According to the IRS, many people who could take a home-office deduction haven’t because the rules are too complex. Starting this year, there’s a new, simplified home-office deduction allows you to deduct $5 for each square foot of home office space, up to a maximum of 300 square feet (for an annual max of $1,500). When filling out Schedule C, just put this amount ($5 x your square footage) on Line 30. Important tips for home office deductions: • Do not double count office expenses on lines 16, 25 and 27 AND also include those expenses on Line 30. Put them on Line 30. • If you worked from a client’s office for a period of time, you may not be able to deduct home office expenses for that period. • Once your office is set up, shoot some photos. This can help support your claim, if questioned.
• Keep any receipts and bills for household expenses you’ll be claiming as deductions. • The IRS can be quite serious about the “exclusive” use function. This doesn’t prevent you from taking personal calls at your desk, like you would at a regular office, but it does mean that if your spouse/children use the same space after-hours, the IRS can reject your claim. OTHER DEDUCTIONS: Health insurance premiums: You qualify to deduct your total health care insurance premium costs only if you were not eligible to enroll in an employee plan or a plan through your spouse. You can claim this deduction on Line 1 of Schedule A form 1040. Educational expenses: If you took classes to improve or maintain necessary skills for your business, you can deduct education costs. You can’t deduct education costs for learning a new trade unrelated to your business. You’d deduct this on Line 21 of Schedule A form 1040. Self-employment tax: You can deduct half the cost of Medicare and Social Security tax (the portion your employer normally pays for) on form 1040 Line 58. Unpaid invoices: You can write off the total amount of unpaid invoices as bad debt on Line 6 of Schedule C form 1040 -- but only if you already recorded it as income. This would only be the case if you record any outgoing work as a sale, called “accrual” accounting. Most freelancers operate on a cash basis, reporting only the income that they received from clients, in which case you would not be able to take unpaid invoices as a deduction. Disclaimer: This is meant as a guide, not professional advice. If you have any questions about your taxes or your deductions, hire an accountant or ask a tax professional.
Healthy tax habits aren’t just for Uncle Sam. Keeping track of your finances enables you to make objective decisions about your business and stay ahead of the game! And, in the case that the IRS does have questions about your wild, wild, freelance lifestyle, you’ll be prepared to pull back the curtain and let them know your business is no rodeo. Use this checklist as a guide for implementing healthy tax habits in your day-to-day. I use an accounting software to keep track of my expenses and revenue. I set aside at least 1/3 of every paycheck for taxes in a separate savings account. I have an accounting system and therefore know who owes me money. I keep all my receipts from at least 6 years back. I have photos of my workspace and other deductions. I regularly pay estimated taxes in April/June/September/January. I’ve set up an entity/properly structured my business. I report based on received, not earned income. I’m prepared to file tax returns in the state where I live, and the states where my client’s businesses are located (if I did work there). I don’t have 1099s from my clients but I’m self-reporting my income anyway. I’m not prepared so I filed for an extension! HEALTHY TAX HABITS: A CHECKLIST freelancers union TAX RESOURCES Disclaimer: This is meant as a guide, not professional advice. If you have any questions about your taxes or your deductions, hire an accountant or ask a tax professional.
freelancers union 2017/2018 HEALTH INSURANCE GUIDE A Healthcare Glossary
What you pay each month for your insurance plan. The amount you are responsible for paying towards medical expenses before your insurance benefits kick in to pay the rest. This resets every year on January 1st. While meeting your deductible, keep in mind that the amount you pay will reflect the discount that your insurance company has negotiated with the doctor. In general, plans with higher premiums will have lower deductibles, and vice versa. This means that usually on plans with a lower monthly cost, you will be responsible for more of the costs of healthcare services before the insurance company begins to kick in their part of the payment. The percentage of a medical expense that you are responsible for paying. The insurance company pays for the rest, hence “coinsurance.” (Again, keep in mind that the expense will reflect the discounted amount negotiated between the insurance company and the doctor.) A fixed dollar amount that you pay out of pocket for a medical expense; for example, a visit to the doctor might require a copay of $35. The maximum amount you will be responsible for paying toward medical expenses covered by your plan. Your out of pocket maximum includes copays, charges applied toward the deductible, and coinsurance you have paid over the year for both medical and pharmacy. Once you’ve reached your out of pocket maximum for the year, your insurance will pay the rest of covered expenses at 100%. If you receive services that are not covered by your plan, you will be responsible for paying for those services. For example, cosmetic surgery or an out of network doctor. 2 Premium Deductible Co-Insurance Co-Payment (“Copay”) Out of Pocket Maximum
An HMO plan is a plan that provides benefits for services rendered by in-network doctors, hospitals and other healthcare providers. You will need to select a Primary Care Physician (PCP) for all of your basic healthcare needs. If you need to see a specialist, such as a cardiologist or an orthopedic doctor, you will need to get a referral from your PCP. In cases where you need to seek emergency, life- saving treatment, you do not need a referral. If you receive any non-emergency care without a referral, or if you go outside of the network for any non-emergency services, your plan will not cover those services and you will be responsible for any charges you incur. Any charges you pay for services not covered by your plan will not accumulate towards your out of pocket maximum. A PPO is a health insurance plan that also relies on a network of healthcare providers. However, it offers more flexibility when it comes to getting out-of-network coverage and will sometimes pay for out of network care, though usually at a lower rate. PPO plans may have higher premiums and deductibles and are not available to individuals in all locations. For example, the only way to access a PPO plan in the New York City area is to enroll in health insurance through a special group plan. With an EPO plan you don’t need to choose a primary care physician, and you don’t need referrals to see a specialist. However, you’ll have a limited network of doctors and hospitals to choose from, and EPO plans don’t cover care outside your network unless it’s an emergency. Things like vaccinations; annual check-ups and wellness visits, screenings for depression, cancer, or alcohol misuse; diet counseling; and a number of other things qualify as preventive care. This is because they’re intended to find and nip issues in the bud before you get sick! For a list of services that may be considered preventive care, visit: https://www.healthcare.gov/preventive-care-benefits/. 3 HMO (Health Maintenance Organization) PPO (Preferred Provider Organization) EPO (Exclusive Provider Organization) Preventive Care
Essential health benefits are things that all ACA-compliant insurance plans are required to cover, and include services such as wellness visits and preventive care. Under the regulation, each State is responsible for helping to set the standard for benefits in their region. The 10 EHB categories are: • Care at a doctor’s office • Emergency services • Hospital care • Pregnant mother and baby care • Mental health and addiction treatment • Prescription drugs • Rehab and skill development services and devices • Lab services • Preventive & wellness services and long-lasting disease management • Dental and vision care for children Open Enrollment is the one time per year when health insurance plans are openly accepting new enrollments. This is when you can pick your health insurance coverage for the upcoming year, including selecting a new plan and/or adding or removing dependents to your coverage. For 2017/2018, the open enrollment period goes from November 1, 2017, to January 31, 2018. In order to enroll in new coverage outside of this time window, you must have a qualifying event (such as moving to a new service area; certain changes in income; or a change in family size such as a marriage, divorce or new baby). For more information about qualifying events, please visit https://healthcare.gov. 4 EHB (Essential Health Benefit) Open Enrollment
Under the Affordable Care Act, all health plans now include coverage for prescription drugs. However, the amount of coverage may differ from one prescription to the next and you will often see prescription coverage described in terms of “tiers.” If you are on a specific medication, you should check your insurance carrier’s formulary to make sure it will be covered and to see which “tier” it may fall into: Tier 1 - these are typically generic and other common prescription drugs. Depending on your carrier’s specific policies, Tier 1 may also include some cost-effective brand-name drugs for common conditions. Tier 2 - these are typically brand-name prescription drugs on your carrier’s formulary Tier 3 - these are typically less common and more high cost prescription medications that may be needed for certain conditions, including prescriptions that may need to purchased from a specialty pharmacy A list of all prescription drugs covered by a plan’s pharmacy benefit. The decision to cover a brand name or generic drug is made exclusively by the insurance carrier and is usually developed by a panel of physicians and pharmacists to ensure there are sufficient options in each drug class. This list is usually provided on the insurance carrier’s website and is subject to change at any time. A formulary may vary from carrier to carrier, so it’s best to contact your carrier directly to inquire about any medications you may be on. The Affordable Care Act created a new type of plan designed specifically for adults under the age of 30 (and those meeting certain “hardship exemption” criteria). Generally, catastrophic plans have significantly lower premiums than other comparable plan designs and have almost all services apply to a single deductible. You can learn more about catastrophic plans here. 5 Buying health insurance doesn’t have to suck. Buy insurance from people who have your back at https://freelancersunion.org/benefits Pharmacy Tiers Formulary Catastrophic Plan
freelancers union 2017/2018 HEALTH INSURANCE GUIDE SUBSIDY GUIDE Looking for an insurance plan for 2018? It’s possible that you qualify for a subsidy via the Affordable Care Act. Read on to found out if you qualify! And if you do, all you have to do is choose a plan via the Freelancers Union platform, go through the enrollment process and your subsidy will apply. If you have any trouble, we recommend calling the carrier to determine the status of your subsidy.
WHAT’S A SUBSIDY? A subsidy is financial assistance for buying health insurance on the Health Insurance Marketplace (also known as the exchange, or “Obamacare”). In other words, your subsidy helps pay for some of your monthly health insurance costs. Here are 3 things that determine if you are eligible: • How much health insurance costs where you live • What your income will be in 2018 • Your household size There are a number of third-party websites that can help you figure out if you qualify for a subsidy. Try using the calculator at the Kaiser Family Foundation to find out if you qualify for a subsidy. Generally, you can make up to 400% the federal poverty level in order to qualify for the advance premium tax credit. For an individual, this is around $46,000. For a family of four, that’s around $95,000. If you make less than this, you will probably be eligible for a subsidy! I QUALIFY FOR A SUBSIDY. WHAT NOW? You can apply your subsidy in different ways: If you buy health insurance using the advance premium tax credit, you can apply the credit directly to the health plan in which you enroll. There are three different ways you can use the advance premium tax credit: • You can apply the advance premium tax credit equally throughout the entire year, so that your monthly premiums for your health insurance are lower • You can choose to get the entire advance premium tax credit back as part of a tax return at the end of the year • You can use only some of your credit during the year and get some of it back in a tax return at the end of the year Please note: In order to receive your subsidy, you must choose a health plan by December 15th, 2017. 2
Depending on where you live, Freelancers Union may be able to help you apply a subsidy towards a plan. Search on our Health Benefits Platform to see which plans are available through Freelancers Union in your area. OK, BUT ESTIMATING MY INCOME IS... IMPOSSIBLE. For many freelancers, income can vary each year, and you never know how much you’re going to make... until you actually make it. Honestly, the subsidy process probably wasn’t designed with freelancers in mind. For most people, that “estimated income” number (which you may see listed as “MAGI”), will be the same as the Adjusted Gross Income (AGI) reported on your federal tax return (Line 37 on Form 1040, Line 4 on Form 1040-EZ, and Line 21 on Form 1040A). If you expect to make about the same in 2018, you may want to use that number. But if you expect to make more or less this year, the government expects you to make your best educated guess. Yup, guess. You may want to start with your 2016 AGI and add or subtract to come to the right number. WHAT IF I ESTIMATE WRONG? The good thing to know is that if you estimate either too high or too low, you’re not going to “get in trouble”. The government will try to match your estimated income to your tax statements, but they’re focused on catching big errors, like a person who makes $150,000 a year and but says they’re unemployed. If you estimate too low, you will receive the rest of your premium tax credit as a credit on your tax return and may receive a tax refund. If you estimate too high, you may be required to pay back some of your subsidy to the government. This would be charged directly to your end-of- year taxes (or be subtracted from your tax return). If this seems like a huge headache and you can afford to do so, it might be a good idea to receive your subsidy as a tax credit at the end of the year, rather than applying it to your monthly premium. Consumers Union has a very good guide on how to estimate your self- employment income 3
WHAT IF THE GOVERNMENT ASKS ME FOR PROOF OF INCOME? When you’re applying for a subsidy, if you give an amount lower than your 2016 AGI, you may be required to submit additional documentation proving your lower income for 2017. Here are some acceptable forms of documentation for freelancers (from Consumers Union): • Most recent 1099-MISC • Most recent quarterly or year-to-date profit and loss statement • Bookkeeping records or a self-prepared ledger that shows income and deductible expenses • Bank statement showing deposits and expenses from your business WHAT HAPPENS IF I DON’T QUALIFY FOR A SUBSIDY? To see what plans are available through Freelancers Union, search by state on our platform. When you buy through us, a portion of your purchase goes back to the independent workforce, at no additional cost to you. We fight for better policies for freelancers every day – and now, more than ever, it’s important that we stand together to ensure that the next system works for us. Buying health insurance doesn’t have to suck. Buy insurance from people who have your back at https://freelancersunion.org/benefits 4
freelancers union 2017/2018 HEALTH INSURANCE GUIDE HEALTH INSURANCE FAQ’S If only choosing health insurance was like picking out a Netflix plan! Here at Freelancers Union, we try to make it as easy as that. As an advocate for our members, our mission is to protect and improve the lives of independent workers. Part of that means helping you navigate the insurance industry as well as connecting you to quality coverage at an affordable price for the freelance lifestyle. Additionally, when it comes to insurance, we’re experts: We have over twenty years experience connecting freelancers to the right insurance plan. We offer a range of plans through a National Benefits Platform – and when you purchase through us, you support the ultimate goal of creating a benefits system that makes sense for freelancers. Plus, by buying through us, you help sustain the union’s advocacy, support and community involvement and can rest assured that we’re here for you if you ever have questions about your health plan. But, however you choose to purchase health insurance, we’re here to help you understand the ins-and-outs of different plans and find one that is right for you.
Do I really need health insurance? Yes. It’s not only good for you, but, under the Affordable Care Act (aka Obamacare), it’s also required that everyone get health insurance. The penalty for not having health insurance in 2016 and 2017 was pretty significant -- it’s 2.5% of your total yearly household adjusted gross income or $695 per adult / $347.50 per child, up to a maximum of $2,085 for the year, whichever was higher. In 2017, the maximum penalty will be adjusted for inflation, but will remain about the same. I got a notice that my plan is ending. How do I find a new plan? Since health reform launched in 2014, there have a been a lot of changes in what plans are available each year. If your plan is ending, you have until December 15 to pick a new plan. Starting November 1, you can shop for a new plan on our benefits platform. I think I’m eligible for a subsidy. What can I do? Under the ACA, if you make less than about $45,000 as an individual (or $94,200 for a family of four), you may be eligible for a subsidy or tax credit towards your health plan. This is great news for many middle- and low- income freelancers. You can get an estimate of what subsidies you might qualify for by using this great Kaiser Family Foundation subsidy calculator. If you think are eligible for a subsidy, rest assured that our platform will likely connect you to your local exchange to access financial support. However, this ability is not available in every state. When can I enroll in health insurance? Open enrollment for 2018 coverage begins November 1, 2017 and ends December 15, 2017. During this time, you can enroll in a new plan or change your current plan. To make sure coverage for 2018 is in place on January 1st, you will need to enroll and pay for the new plan by December 15, 2017. What kind of plans are out there? Under the Affordable Care Act, insurance plans for individuals are always offered at five metal tiers: • Catastrophic (available for those under 30 years old) • Bronze • Silver • Gold • Platinum As you might guess, higher metal tiers (shinier metals!) are usually more expensive upfront but the total amount you pay for covered services will be lower. Lower tiers (catastrophic and bronze) have lower monthly premiums but you will pay a higher total amount of the covered medical expenses throughout the year. Please note that all of the plans cover the same kinds of services. The portion of the costs of your health care services that insurance will pay will vary based on the type of plan you buy. 2
Can I enroll at a different time? Yes, but only if you have a special circumstance which makes you eligible for a special enrollment period. These special circumstances include: • Gaining or becoming a dependent • Losing existing health coverage (through job loss, separation from a spouse, etc) • Expiration of COBRA • Loss of eligibility for or expiration of a student health plan • A permanent move or relocation to an area with different health plans • Dramatic change in income that affects your eligibility for tax credits or cost sharing reductions. If any of these special circumstances sound like you, you may be eligible for a special enrollment period. And even if they don’t, it’s good to keep them in mind. Freelancing can be up and down, and if you find yourself needing new coverage, remember that you might be eligible to enroll outside of open enrollment! BUT, if you don’t enroll by December 15, and you don’t have a qualifying event that will allow you to enroll during a special enrollment period, you will be locked out and unable to buy health insurance until Open Enrollment for 2019. What if I have a pre-existing condition? The ACA made it illegal for insurance companies to charge you higher premiums for a pre-existing health condition or to deny claims for treatment of a pre-existing condition. No one is allowed to ask about your health history any more and/or try to make you pay more. Where can I find health insurance? You have three options: • Our Freelancers Insurance Agency’s National Benefits Platform, which provides a curated selection of health insurance options for freelancers across the country • Your state’s health insurance marketplace (you can see a directory of state exchanges and the federal exchange at healthcare.gov) • The websites of individual private insurance plans Hold on, what do all these insurance terms mean? Here’s a glossary of some health insurance lingo to help you through the enrollment process. Where should I go if I have questions? Start by viewing your options at https://freelancersunion.org/health. If you have specific questions about a particular plan, go right to the source and call the carrier to get the best and fastest answer. (We post special phone numbers for carriers when we have them.) You can also email us at membership@ freelancersunion.org and we’ll respond as quickly as we can. So go forth and get covered! And spread the safety net: share our National Benefits Platform and tell your friends to get health insurance, too. 3
THE FREELANCE TOOLBOX www.thefreelancekit.com ORGANISATION, MARKETING, SOCIAL MEDIA AND MORE! 40TOOLS
www.thefreelancekit.com 2 Thank you for downloading your free toolbox. We’ve included 40 tools to help you manage your freelance or small business. We hope you find it useful and if you want to buy The Freelance Kit then click here! The Freelance Kit is a pack of high-quality business templates and documents, designed to help you in your freelance or small business, no matter what stage you’re at. The kit includes business planning, content and social media planning, financial templates, project management, general planning and, consists of a mix of PDF’s along with some good old-fashioned spreadsheets. We’ve curated over 130 pages of content which will save you time trawling the internet for those templates that seem to be so hard to find. When you purchase the kit, you’ll also join a private Facebook group where you’ll have access to as much support as you need, be able to meet other freelancers and have first dibs on freelance and small business retreats and events.
www.thefreelancekit.com SOCIAL MEDIA ORGANISATION Hootsuite For your social media dashboard and scheduling. Google Drive Store and share documents easily. LinkedIn To build your contacts and business relationships. Trello Plan out your projects and tasks. Flipbook To source trending content quickly. WeTransfer Send large files. Skype To talk to clients and connections. Dropbox Store and send large files. Grum To schedule content to Instagram. iCloud Store documents, images and video. Planoly To visually plan your Instagram feed. Some great functions including drag and drop. Google Docs Create and share documents easily including Word, Powerpoint and Excel. 2
www.thefreelancekit.com MONEY AND LEGAL FREELANCING / PROJECT MANAGEMENT FreeAgent Brilliant platform that manages finances, keeps track of overdue invoices and monitors time spent on projects and clients. Toggl Time tracking software. Quickbooks Similar to FreeAgent. RescueTime Monitors internet useage and time and makes suggestions to improve productivity. Shake Free legal documents. Facebook Workplace Brilliant way to share project information and news with others. Asana A project management app that enables you to organise yourself and your remote team. TermsFeed Generates privacy policies, terms and conditions. 3
www.thefreelancekit.com MARKETING DESIGN, IMAGES ANDWRITING Campaign Monitor Design and send beautiful newsletters. Canva Create amazing images, presentations, social media assets and more. Lead Pages Build landing pages that convert to sales or newsletter sign ups. Word Swag Generate quotes and words using your photos. Google Analytics Keep track of your website traffic and statistics. Pexels Amazing source for royalty free images. LinkedIn Export your contacts data and build your email list. Etsy Buy branding packs, colour palettes and business templates. Moz Keyword finder. Hemingway An app that helps you be a better writer. Yoast SEO Wordpress plugin that optimises your website SEO. Grammarly Brilliant online, advanced grammar and spell checker. 4
www.thefreelancekit.com WELLBEING TRAVEL Headspace Amazing meditation app that’s suitable for all levels. Work Hard Anywhere A community of creatives, freelancers, and entrepreneurs who work together to promote the coolest and best spaces to work from. Anxiety Relief A brilliant app that helps relieve anxiety and promotes calm. Remote Year Allows freelancers to travel the world for a year or 4 months as a group, combining co-working and travelling. Such an amazing initiative! Map My Run Exercise is important, especially when you work from home! Map my run monitors how far you walk or run and monitors fitness levels. We Work Cool co-working spaces located around the world. Travello A social networking app that allows you to find other nearby working travellers. Sleep Cycle An intelligent alarm clock that analyses your sleep and wakes you in the lightest sleep phase. 5
www.thefreelancekit.com     

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