Sunday, July 3, 2011

Freelancing 101

Last week, I received a call from a new freelancing film editor who must be the most prepared and organized person with whom I've ever have the privilege of speaking. I hope she becomes a client in the future. She began freelancing three months ago and wanted to know what she needed to be doing as a freelancer. Her enthusiasm warmed the cockles of my heart. So, as it's July already and I haven't posted for a month here are some important tips for new freelancers.

Pay quarterly estimated taxes. Your employer used to withhold taxes from your periodic salary payments. You are now responsible for paying your taxes instead of your employer with the added bonus that you are now responsible for all of your social security and medicare contributions; as a W2 employee your employer paid half of it. You need to pay quarterly estimated taxes based on your income less your business expenses. Also, if you're in New York, you must pay the MCTMT Commuter Tax.

Record keeping: keep all your receipts for business expenditure and copies of your invoices.

Get business cards. You're a true freelancer in the eyes of the Department of Labor if you are free to advertise your services to anyone. Get a website, put up ads and hand out your business card to everyone. This will distinguish you from an employee in the eyes of the law.

You should also consider starting up a business entity like an LLC or Corp in the future when you begin to make decent income.

Clients: the most important hurdle to cross when turning freelance is finding clients. Advertising and networking have never been easier now we have Facebook, Twitter, LinkedIn and other networking websites and groups but word of mouth is how most freelancers get their gigs.

Word of mouth also offers you some protection against unethical or roguish clients. If you and your client have mutual business contacts, that client is less likely to engage in bad behaviour than if he found you on Craigs List. I have direct experience with this; try to develop a community of clients who know and care about each other. Avoiding the scoundrels and bad paying, unscrupulous customers is par for the course.

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