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Thursday Bram Q&A: Finance, Credit and the State of Freelancing

mug - Thursday BramIf you read FreelanceSwitch, you’re already familiar with Thursday Bram’s work. She covers personal finance and small business topics online–she writes for FreelanceSwitch.com and WebWorkerDaily.com — as well as on her own website, ThursdayBram.com. Thursday writes full-time and is based in Maryland.

First, a bit of history–how did you get started freelancing and where are you at in your career at present?

I started freelancing seriously in college. I was working on the college newspaper and I started taking on some assignments outside of it. After I graduated, I kept freelancing while looking for a job. I had less then spectacular results in my job hunt: while I actually found a job, I wound up quitting within two weeks. Since I was able to bring in the equivalent of a full-time salary freelancing, I stopped looking for a day job.

What was your biggest revelation as a freelancer in terms of protecting yourself financially, especially at tax time? Did you learn anything the hard way?

I’ve been lucky enough not to have any major problems in the way of taxes. The closest I’ve come is having a much better year than I expected, meaning that my estimated quarterly payments fell short of what I owed. I had to make up the difference in April and pay a small fee, but it wasn’t a major crisis

My husband and I actually have done our own taxes in the past. But my freelancing income is enough to turn a simple tax return into an ordeal — we hired a CPA last year, and won’t ever go back. It’s so easy to make a mistake when preparing a tax return, especially when you don’t get all of your income from one source. Many tax preparers will take responsibility for any errors in your tax return and I think it makes sense to reduce your risk, even if you have to pay someone else to handle your taxes.

In today’s freelance environment, what do you think is the biggest pitfall or challenge for freelancers to meet financially?

Health insurance is definitely the biggest problem freelancers face. Keeping coverage is expensive, especially for a freelancer who can’t be sure exactly what her income will be from month to month. But without health insurance, medical coverage is insanely expensive and you run the risk of a major financial crisis if you’re ill or injured to the point where you can’t work.

There’s no easy solution to health insurance, either.
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