Freelance Work

Welcome to the club Andy.

There are at least a few of us who are piecing several jobs/projects together.

With regard to your question I think it’s important to take into consideration how you get paid. If you’re hourly and filled out a W-4 with the employer, you’re an employee of the company and will have tax withheld. Their liability should cover you, though you probably wont be eligible for full time benefits like health insurance..in which case you should ask for more hourly.

Otherwise, if you’re an ‘independent contractor’ you should get paid perhaps double your full time hourly rate. If you are usually employed full time at $20/hour as a regular employee you should ask for $40-60 minimum as an independent contractor because you will be responsible for your own tax liability at the end of the year which could be alot, let alone your own overhead such as paper, print cartidges, electricity, phone, gas, and software to name a few. You will also likely be responsible for your own health insurance, etc, so forget about it..lol.

I have my own business, but I work as a regular part time hourly employee for two firms. I would bet most firms would be more interested in having you as an hourly part timer.

A Sole Proprietor business is the easiest and cheapest to set up, for reporting taxes, and for dismantling. Unless you have a lot of assetts, I don’t know why you would want to complicate it. … if you use your own name, all you have to do is report your income unless you are collecting sales or service tax (we don’t have service tax in my state). You’ll need to file a Profit & Loss from small business form with your Form A and Self Employment Tax, as well as the various schedules for deductions. Get Turbotax or something similar to help you out. … if it grows,  you’ll want to get an accountant and look into an LLC or incorporating.

If you work as a contractor or consultant, be prepared to receive 1099’s in the mail come January. The 1099 is the kind of like a W2 in which the contractee files with the gubmint that they paid you, the contractor, that year. You then use the 1099 to report your income, like a W2. The tax software will tell you where to put this info, usually in the “other income” section with bank interest or capital gains. Be prepared to lose half the money you earned on your 1099 from fed and state taxes.

Its really hard to know if you are doing everything right, and when to start an LLC, get insurance and the like, and the government (depending on the state) doesn’t make it cheap or easy. You might look into something like quickbooks if you start dealing with a few firms to keep the invoices straight and your tax liability out in the open.

Good luck!