Mark your calendars, April 15, 2009 is fast approaching. Tax time is hell time for most freelancers, but here’s a little hint that will make tax season 2010 seem like a breeze. Grab your pens, kids, this one’s a real brain tickler.
When you see how much you owe in taxes for 2008, make a mental note. That’s the minimum you should consider spending on your business in legitimate, legal expenses for 2009.
You’re going to earn more freelance money in 2009 than you did in 2008 unless you hit bad luck, give up and go back to your day job or just quit trying. Plan on spending more money on your business this year–what’s the point in giving it over to the government when you can take legit, IRS-approved deductions for upgrading your office, advertising your business or hiring casual labor to take some of the donkey work off your plate?
Why did I choose a 2005 calendar to illustrate this blog post? Because I wound up owing the IRS for my earnings in 2005, and if I had just planned ahead and made some crucial investments in my writing business I could have paid far less while giving my work a much-needed boost with a high-speed Internet connection, a GOOD cell phone instead of the crappy one I had put up with for so long, and several other upgrades.
Be smart in 09. Do the math and plan ahead. Make those purchases and promote your business. You should pay all the taxes you owe–but make damn sure you don’t owe as much as you could when there are legit deductions to be had.
Note: After a few horrified responses to this post, I should point out that I am wearing the pointy hat for much of this screed…that is to say I may have actually DONE this, but remember that all editors are slightly crazy and I’d never expect anyone to seriously take this advice unless they are as much of a rabid workaholic and certified nutter as I am.
There is no one tried and true way to make the jump from part time to fulltime…except possibly ONE method, the one I tried myself with great success. (How egotistical is THAT? There’s no way to make it except MY way, HAH!) Yet, when I think about it, this is the only method I know that makes any sense at all IF you have a day job you need to dump with extreme prejudice, and want to get yourself into a freelance situation where you wake up and tell yourself that your job is getting in the way of your career.
Naturally it’s a painful, isolating and downright masochistic path to follow to fulltime freelance success, which is why many people shy away from it. And who can blame them? Do you really want to suffer for your dream? You’ll find out just how committed you are when you contemplate doing “the Crazy Joe Wallace Method”. Also known as “Leaving Las Vegas, For Writers.”
What you do is decide, sort of like Nicholas Cage in that uber-depressing movie, that you’re going to write yourself to death.
Well, not quite. The actual trick is to write so hard that you WISH you were dead, but manage to take care of yourself in the meantime enough to maintain your madness. What madness would that be? Continue reading How to Go Full Time as a Freelancer: Five Painful Steps