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.
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.
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.
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.