The Freelancer’s Guide to the Gig Economy

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From the Future of Work, Shelly Kramer offers guidance on how to be successful as a freelancer.  Shelly writes:

Four Habits of Highly Successful Freelancers (Regardless of Industry)

To be successful in any industry, there are a few key considerations for freelancers:

  • Focus on maximizing your earning potential. ALWAYS remember that you deserve to get paid what you’re worth.
  • Do everything in your power to position yourself in the way of stable assignments. Got a good thing going with one client? Good for you! Don’t lose that lifeline, but take the blinders off. Remember to be on the lookout for other opportunities so that your work well (and your bank account) won’t run dry.
  • Ask for referrals and references. A good personal referral or lead from a happy client is the equivalent of a freelancer’s golden ticket.
  • Consider joining the Freelancer’s Union. It’s free, and you’ll gain both resources and connections. (If you’re in the market for health care benefits, they offer insurance plan options as well.)

Succeeding in Specific Industries

Freelancers working in specific industries can also benefit from the following advice:

Academia
If you’re a young Ph.D. or recent graduate trying to enter the academic workforce but full-time opportunities aren’t exactly knocking, resist the urge to take unpaid writing, editing, or teaching gigs in exchange for the promise of advancement. Rather, focus your energies on building a steady, stable career that pays; remember, adjunct work isn’t a long-term solution. As a freelance academic, you’ll have the advantage of choosing a location you love and being able to stick around, rather than having to move thousands of miles away for full-time faculty positions.

Multimedia
If you’re a multimedia freelancer—i.e., web designer, graphic artist, writer, editor, photographer, etc.—you should focus on using that same media to promote your brand. Coincidentally, your brand is yourself. Social media, for example, is an incredibly powerful—and free—tool you can use to promote yourself and your work. You can use it to post your portfolio and join professional groups and organizations. If your name is not at least somewhat visible, how will you woo prospective clients? Show them why they should believe in you enough to hire you.

Technology
For tech startups, community is everything. And, like in most businesses, the people you know matters. If you’re a tech freelancer, the Internet provides a phenomenal soundboard for you to tout your skills and meet “virtually” with seasoned executives or bold entrepreneurs who just happen to be looking for someone with the precise skills you’ve got to offer. In addition, the tech startup industry can come with a lot of entrepreneurial leverage for freelancers to get in on the ground floor of young companies—or eventually launch their own.

What About Taxes?

To paraphrase Benjamin Franklin, you can’t be certain of anything in the world besides death and taxes. The process of filing taxes as an independent contractor is a whole different ballgame compared to that of a full-timer.

For the most part, if you are self-employed—that is, you are an independent contractor, sole proprietor, part of a business-operating partnership, or own your own company—you need to file taxes both quarterly and annually. (Note that if your business profit is under $400, you won’t need to file a tax return.) Freelancers must pay both self-employed tax (called SE tax) and income tax. Here are some things you need to know:

  • Use a 1040-ES form to calculate the payment amount for your quarterly SE taxes. (This covers your obligation to Social Security and Medicare.)
  • For your annual submission, you’ll need to fill out a 1040 form to cover your income taxes. If you have contracted with multiple companies, those companies are obligated to provide you with 1099s for that work. Use the information from the multiple 1099s to fill out a single 1040.
  • You may claim half of your SE tax obligation as a 1040 deduction in order to minimize your tax burden. See Figure 1 below for a visual example of how this works. (Note that there are additional deductions, like allowances for your home office or mileage. Read Business Insider’s freelance tax suggestions for more information and definitely check with your accountant for tax advice).

Read the full story at The Freelancer’s Guide to the Gig Economy – Future Of Work

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