My accountant has been over the last few days do do my first quarterly tax returns. Man, this is one part of freelancing I don’t like. I don’t mind paying my taxes. Well, I don’t like it, but I want to pay what I owe and not any more than that. The taxes aren’t too bad so far, but I’m about to have to pay taxes on earnings. I’m showing a profit for the end of last year, which isn’t the case. My expenses for getting setup, among other things, there just wasn’t any profit. Because of some where some deposits fell and when the payments made after those deposits came it shows on paper that I made a profit.

In the long run I don’t think it’ll be too bad. We still haven’t finished recording all my expenses for last year and I’ve got a few months before we actually pay my yearly taxes.

But seriously, taxes are much simpler when you work for someone. And people will give you loans. I always thought there were plenty of breaks for a small business to get started yet every time I turn around a different department has their hand in my wallet draining my money.

Any of you freelancers or small business owners got any tax tips?

Technorati Tags: Freelancing, Small Business, Taxes

John Chow says “there is no secret formula” and it’s something I believe to the very core of my being. I used to think there was some “magic” out there for just about everything. You go around reading up on anything looking for the key to it and you’ll find people trying to sell you their secret sauce. While there are certainly specific tips to doing anything worth doing the formula is always the same. John mentions diet as an example and I can testify to that. I’ve done a lot of research on losing weight and getting healthy, mainly so I knew what I was doing. I was never under the delusion that there was a magic formula to help me lose weight I was just looking for great exercise, healthy food choices and just educating myself on nutrition and health. Almost all the resources I went to were trying to sell “weight loss secrets”. There aren’t any.

The secret to succeeding at anything is putting in the hours and dedicating yourself to the process. For web sites that means create a good site, work at getting traffic and maximizing your ad space. That’s where the specifics do come in and you can learn from other people or experiment on your own. But the basic formula never changes. Of course you’ll hear people selling the get rich schemes and 99% of the time they’ll sell you an ebook on how to sell ebooks to people. If your not prepared to work for it then don’t bother trying.

Chris Garrett writes about The Myth of Freelance Pay, a post inspired by the Writers’ Strike. The strike is hitting home for plenty of people and I think web publishers, bloggers and other content producers are keenly interested in what’s going on. Chris points out that some people are being pretty negative about the writers for wanting more money assuming that they get paid too much already. I don’t know if you know any freelance writers or not but most of them don’t make a living at it. More than a few freelance writers have a “regular” job that helps pay the bills. Chris compares it to freelancers (web dev, design, seo etc) in our field. He brings up some good points, like dry spells, waiting for checks to come in and those kinds of things. Freelancing can be tough for a lot of reasons:

• You don’t have a boss. You have lots of them. Instead of answering to one person you know have lots of bosses.
• There are times when you should be billing someone but you aren’t because you’re too nice, like when your doing research or answering emails or in meetings.
• You look at everything in terms of how many hours it’s going to cost you. That new HD TV might be 15-20 hours of work.
• Taxes stink! You think you got it bad as an employee. Oh no my friend. Oh no.
• Everyone thinks your job is easy and they have a 12 year old who could do it.
• Communication is harder. Email and Phone just aren’t the same as doing it in person.
• It can be kinda lonely. This is also a benefit ;)

Freelancing can be great too!

• You can sleep in after working late the night before.
• You don’t have to worry about office politics or office mates bugging you all day
• You can wear whatever you want to work most of the time.
• You commute time is reduced to 0 and not paying $200/month in gas is awesome!
• You get somewhere like 2 hours back in your day (lunches, commute, bs meetings etc.)
• If it’s not working out you can fire your client! While you can quit work, it’s just not the same.
• You get to meet more people than if you were just in one office. If your lucky, like I have been, you get to work with great clients!
• I can do chores while I’m waiting for lunch to cook or while a long upload is finishing, etc. Multi-tasking is so much easier.

Freelancing has been a tough adjustment for me, I admit it. I’m a very task and schedule oriented person and I sometimes miss working in an office. But it’s a means to an ends and brings me one step closer to relying solely on my own projects to make a living. I’m loving freelancing and learning so much from the experience. I’m sure it’ll get easier the longer I do it. It’s hard to imagine giving up working from home.

Technorati Tags: Freelancing, Work From Home