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Last Updated on March 28, 2019 by Work In My Pajamas
Everyone wants to be “living the dream.” But what does that mean to you? Do you picture rolling out of bed, making coffee, and working while in your own home (and while wearing your pajamas)?
If so, you’re not the only one.
This is what the life of 53 million Americans looks like. They’re freelance workers! The gig is ideal for many — you can work where you want, you can set your own schedule, and you’re doing what you love.
But working freelance is different than working for a company, and you’ll have to learn some tools of the trade. Here’s everything you need to know about being a 1099 employee.
In This Post:
Why They’re Called 1099 Employees
Do you know why a 1099 employee is a, well, 1099 employee? That’s because of the tax form they have to submit to the IRS. You report your income with a 1099 form and pay the necessary taxes based on your income.
Speaking of taxes…
It’s Best to Hire a Tax Professional
If you’re making the switch from a W-2 employee to a 1099 freelancer, say goodbye to the free tax preparation software. A freelancer’s taxes are more complex.
This is why you’ll need a professional to help you, such as an accountant or a tax preparer.
A tax professional knows the ins and outs of the US tax system.
They will file your taxes to ensure there are no issues. In addition, freelance employees may be eligible to itemize certain deductions. A tax professional can help you guide these deductions to reduce the amount you owe.
Advertising Yourself
It’s becoming more common for freelance workers to work with one company or firm, the way Uber does with its drivers. But many professions, such as graphic designers and bloggers, rely on steady clientele in order to get work.
This means you’ll have to advertise your services as if you’re your own business.
If you’re not getting enough business from referrals, create a website with your portfolio, send cold emails, and connect with professionals on social media networks such as LinkedIn and Facebook.
Digital marketing isn’t the only marketing medium. Print marketing methods, such as pre-printed insert advertising, are still popular and effective.
Create Your Own Benefits
Many employers offer the perks of supplying their employees with benefits. However, your freelance clients are under no obligation to provide benefits. This means you have to create your own benefits.
Invest in healthcare, a good IRA or 401k retirement savings, and life insurance.
Not all benefits are serious. For example, many employers offer a generous paid time off (PTO) plan for employees. Offer yourself PTO. Take a couple of weeks off to travel, visit family, or even complete some projects around the house.
Will You Become a 1099 Employee?
Do you dream of working for yourself? If so, you should become a 1099 employee. But where do you start? Whether you want to freelance as a side hustle or a full-time job, here are 40 ways to make money from home.
