My So-Called Freelance Life - Michelle Goodman [16]
I know what you’re thinking: But I just started freelancing . . . so do I really need a business license? According to the rules, yes. Whether your regional government finds out that you’re only grossing $25,000 your first year in business is anyone’s guess. But whether you want to risk it (and any potential penalties) is your call.
BE A CARD-CARRYING FREELANCER. You wouldn’t leave home without condoms, right? So too with business cards. You never know when you might get lucky and meet the freelance lead of your dreams. Thanks to sites like MOO.com, 48HourPrint.com, OvernightPrints.com, and VistaPrint.com, making sassy business cards is cheap and easy.
Don’t be afraid to make your cards offbeat, funny, outrageous. Remember, you’re trying to showcase your creativity. My writer pal Diane Mapes has a retro-looking waitress holding a pot of coffee on her card, which inquires, CAN I GET YOU ANOTHER CUP OF COPY? And recently I saw an amazing card on a blog that was essentially a mini envelope stuffed with alfalfa seeds that grow (out of the card!) when placed in water. The tagline? ANOTHER BLOOMIN’ DESIGNER. What client could resist that brilliance?
Call me paranoid, but I won’t put my street address on my business cards. Instead, I rent a PO box and use that addy. (Helps keep my checks and tax forms safe, too.) Unless you run a business where clients visit your office regularly, you might as well keep the whereabouts of your private residence, well, private.
CALL DIRK IN ACCOUNTING. If you think you don’t need to worry about paying your taxes till early in the calendar year, think again. This may come as a shock to some of you, but freelancers don’t get taxes taken out of their checks. Instead, self-employed folks send their taxes directly to Uncle Sam—in quarterly installments, no less.
So the sooner you get yourself a good accountant and set up an accounting system for yourself, the better (help on the way in Chapter 16). You don’t want to realize on April 1 that you have no idea how much money you made the previous year, you didn’t track your business expenses (let alone make your quarterly payments), and you have no clue how to do your taxes.
I pay my CPA $350 dollars a year to prepare my tax returns, which, as far as I’m concerned, is a small price to pay to keep the government out of my hair. To find a good accountant near you, turn to your fellow freelancers for referrals. (More on how to meet other freelancers in Chapter 7.) It doesn’t matter whether you hire an accountant or a CPA (which is a fancy way of saying “accountant who’s taken a pile of certification exams”). The most important thing is to hire a tax professional who predominantly works with small businesses and freelancers—preferably freelancers doing the same type of work as you—so she’s familiar with the type of expenses and issues your business might have.
Sole Proprietor, LLC, Inc.—WTF?
A lot people mistakenly think you need to incorporate your business in order to work as a freelancer. Maybe they believe putting letters after their business name sounds more Muhammad Ali. Or they enjoy talking to lawyers and finding additional reasons to part with their hard-earned cash. Or they’re terrified to lift a pinky toe off the diving board and prefer to languish awhile in the business planning phase.
A corporation, in plain English, is a business structure that requires you to go through a bunch of legal rigmarole to set up and maintain. Think shareholder meetings, corporate record keeping, labyrinthine tax returns, and a heap of legal fees. The advantage? If your business implodes and you can’t pay your professional debts, you get to keep your shirt, your dresser, and the house you store them in. A limited liability company (LLC) is more like Corporation Lite—same protection