Pay Yourself

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The number of freelancers has gone up considerably just in the last decade as a direct result of the new possibilities available in terms of remote communication. With rapid internet, IM group chat capabilities, eFax options, and the popularity of jobs which can be done virtually (such as blog writing or graphic design consulting), the work opportunities for freelance employees have become widespread enough to be keeping plenty of professionals happy in their self-employed careers. Amazingly, despite how common it is today for people to do freelance work either part-time or full-time, the freelancer’s job is one which is often not taken seriously by others. One of the most frustrating experiences as a freelancer can be when the work already done is not taken seriously enough by the client to be paid out regularly and in a timely manner.

Unfortunately, there are many people out there who continue to believe that freelance work is somehow less professional than in-office work. Because of this, many clients and employers take the attitude that they don’t need to compensate you enough or on a regular basis for the work that you have done. Other times, because of the sometimes laidback approach that the freelance relationship takes, the lack of payment can be just an oversight from the client. As you struggle to get your bills paid, this can be a trying experience. But, the good news is that it’s surprisingly easy to get paid for your freelance work if you make a few changes to your approach.

First of all, the change needs to start with your own attitude towards your work and your money. Many freelancers have an internal voice (or an external one!) telling them that they don’t do “real work”. If any little part of you believes this, you aren’t going to present yourself in a way that demands to be paid on time and enough for the work that you are doing. Do whatever it takes, whether it’s getting external validation from a mentor in the field or saying meditational affirmations each day, to make sure that you actually internally feel that your work is valuable and that you deserve to be paid for it. This internal feeling will shine out through you and actually alter how others deal with you in terms of making your payments.

Secondly, present yourself as a professional. It can be tempting to have a casual connection with the people you do freelance work for. This is especially true if you are working primarily online because of the more casual nature of email and chat conversations in comparison with in-person meetings. However, if your clients see you as their friendly email buddy, they aren’t going to feel compelled to rush to pay you. Make sure that your online persona is professional. Do this in little ways as well as big ones. For example, use a screen name and email for your work which isn’t cutesy; sure “hott_writer_lady” is what your friends know you as online but your client is a lot less likely to take your work seriously with a screen name like that one.

Presenting yourself professionally also means being organized and invoicing your clients regularly. Act as if you are the accountant you would pay if you could afford to hire one. Set aside a particular day of each month, such as the 1st, to invoice all of your clients. Use a professional template which includes the date that the work was done, the assignment, the rate and the total owed. Send this out to each client who owes you money every single month. If you have a client who is often late in paying you, you can add a “Date Due” line on your invoice and mark it “Past Due” when it has not yet been paid. This gets the attention of a surprising number of clients and really limits the amount of people who are not paying you in a timely manner.

If you really have difficulty getting paid as a freelancer and you aren’t able to put in the organized, professional persistence to make sure that you’re getting your money’s worth, you might want to consider hiring a professional to handle the money end of your work. Since you probably only need someone one or two days out of the month, this is unlikely to cost you an excessive amount of money and can actually increase your profits because you’ll be getting paid by clients and won’t be spending time on hunting down money.

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Business or Hobby?

Freelance No Comments »

It’s come time again to do your taxes and you’ve discovered a pleasant surprise which turns out to be something of a mixed blessing. Although the bulk of your income comes from your “regular” job, when you sat down to look at what you earned this past year, you were surprised to see that you actually made some money from the freelance work that you were doing. This is thrilling! As you look at the numbers, you begin to daydream about eventually quitting your “real” job and doing freelance work full time.

But eventually, you pull yourself out of your daydream, look at the mess of papers on your desk and realize that you have an issue to deal with. That issue is your taxes. More specifically, the issue is whether or not the freelance work that you used to do as “just a hobby” is now considered a freelance business. What you hope is that it is. Either way, if you earned money from freelancing, you have to count it as income on your taxes. But if your freelance work has crossed the line from hobby and can be considered a business, then you can also deduct some expenses on your taxes. That’s when you know you’ve made it as a freelancer!

So how do you know if the government considers your freelance work a hobby or a business? It’s kind of an iffy situation because it doesn’t come down to how much you earned from the work or whether you worked elsewhere fulltime. It’s a lot vaguer than that. But what it boils down to is that your freelance work is considered a business if you approach it as a business. This means that if you regularly apply for paid writing jobs, keep invoice sheets and organized records of your work and income and have set financial goals for yourself, then you consider your freelance work to be a part-time business and the government will as well.

So what if you haven’t done those things? Well, if you aren’t applying for paid jobs, then you can’t consider yourself a business. But if you do regularly apply for work, even if you don’t get it too often, then you’re trying to run a business and you can probably prove that. The best thing to do is get organized about your work. Keep records of where you apply and what jobs you do. Even if you only do a little bit of freelance work now and then, if you keep clear records and you make an effort to earn more income this year than next, you’ve got business written all over you. Not only does this mean that you can deduct normal business expenses from your taxes but it also means that the thing which was once your hobby is going to keep earning you more and more money as a business. How exciting is that?

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