Recent labor statistics
suggest that there are currently 15.5 million people in the United States that
are self-employed. This number is expected to continually grow and by 2020,
more than 40% of the American work force will be independent workers.
If you are in the category of an
independent worker or you are looking to become a member of this growing trend,
there are certain things you should consider as a freelancer.
Taxes
As a freelance worker, you will be responsible
for self-employment taxes, which is how Social
Security and Medicare payroll taxes are taken care of. Employers split this
expense with employees, but as an independent contractor, you will pay the
total amount. Keep diligent records of all your business-related expenses to
reduce your net income, and therefore, the amount of self-employment tax you
will owe.
Intellectual Property
As an independent contractor, you will work either
create or come in contact with intellectual property. At the very least, your
contractual agreement should outline the ownership of the intellectual property
and the rights attached to the intellectual property.
Contractual Agreements
Always have one! Having a contractual agreement will protect you and
your client and should address details such as:
- Payments – how much and when are the payments
due?
- Scope
of work – exactly what you will do and when you will have it completed?
- Rights
to the work – we already discussed this in intellectual property, but be sure
to spell out any intention you may have to use that content in promotional or
marketing materials.
While
there are many things to consider as a freelancer, it should not discourage you
from continuing your journey to build a successful business.
