For some, leaving the standard office-based workforce is a dream come true. Choosing to work on a freelance basis is liberating in nearly every sense of the word. There is little to no red tape involved when important decisions need to be made, meetings where much is said and little is accomplished are over, and workplace gossip is a thing of the past. Freelance work also leaves you open to perform the types of tasks that are most interesting and fulfilling to you, leaving behind work that is mundane and monotonous.
However, despite the joys of freelance work, there are three important financial responsibilities that should not and cannot be overlooked. The following items must be regarded as a top concern of freelancers everywhere.
All freelancers must consider taxes when earning money. Because freelance work is not taxed at the outset, freelancers must pay employment taxes, social security, and other federal and state fees either in one yearly lump sum or spread out in quarterly installments. If this is not prepared for well in advance, it can come as a rather large shock when the bill is due.
Tax Calculator – H&R Block offer a nice set of some simple but effective free tax tools.
Xpenser – a cool application to keep track of expenses. Works with Freshbooks and iPhone.
MSN Money – The MSN Money site offer a lot of free tax planning tools like calculators, deduction finders, and more.
- Write-offs that scream ‘Audit me!’
- 10 big deductions too many people miss
- 10 Items You Absolutely Need For Financial Security
- Five Things To Do To (Or For) Your Accountant At Tax Time
- The Business of Freelancing â€“ Saving For Taxes
- Six Things You Must Know About Self-Employment Taxes
Along with the gain of many benefits to being self-employed comes the loss of benefits of working for others. One such benefit that must be addressed is retirement contributions. If you have not already begun a retirement fund, the time to start is now. Preparing in the short term will leave you with fewer worries in the long term.
Choose to Save – A huge collection of calculators to help you plan for anything from retirement to buying a car.
Retire on Your Terms – An online program designed to help you plan your retirement. Brought to you by the National retirement Planning Coalition.
AARP – The AARP has a long list of tools and worksheets to help you plan out your retirement.
- How to Save: A Short Guide for Freelancers
- Ask the Readers: Retirement plans for freelancers?
- Tax-Free Retirement Accounts for the Self-Employed
- Transitions: Saving for the Freelance Future
- Plan for your retirement
As with retirement, freelancers must provide their own insurance policies. In the United States, health insurance is very costly, but so are medical bills. It is wise to plan for the unexpected rather than to hope for good health and few accidents.
Expat medical Insurance – Find a health insurance plan that will follow you where ever you decide to work.
Online Health Insurance – Compare plans and get quotes from a varity of providers all in one spot.
Freelancers Union – Helps freelancers by offering insurace for freelancers among other things.