New Blog for Freelancers, The Future of Writer’s Brew

By now you’ve seen that I’m noticeably absent from Writer’s Brew. That’s because I’ve been fervently working on a new site for all freelancers - writers, web designers, dog walkers. GoingFreelance.com went live on October 1.

It’s highly unlikely that I’ll be updating Writer’s Brew anymore. In fact, in a few months, the URL is going to redirect to GoingFreelance.com.

Going Freelance has less focus on writing and more focus on the business of freelancing - how you can be a successful freelancer, managing clients, leaving your day job, etc. I’m extremely excited about the new site and I hope that you all join me there.

P.S. I’m accepting article pitches for Going Freelance. If you’re interested in contributing, check out the Contribution page.

Taxes for Self-Employed

This is my first year being self-employed and the first year I’m having to pay my own taxes. If you thought having taxes deducted from your paycheck was awful, paying self-employment taxes is worse. When your employer pays your taxes for you (by withholding them from your income), you never really have the money, you just see the evidence of it being taken away from you. As a freelance writer (or other self-employed individual), you receive the money and then you have to pay it out, just like any other bill, except it’s much higher.

Self-employment taxes are 15.3% of your net business income. That is, your income minus any business expenses. If you have $1000 per month in receipts, $100 in business expenses, your net business income is $900. Your self-employment tax for that month is $137.70.

Since there is no tax withholding for self-employed individuals, you’re expected to send your estimated income tax payments to the IRS on a quarterly basis. Not only do these payments include your self-employment tax, they should also include your federal income tax payment, too. Federal income tax is also based on your income, but your tax rate goes up as you make more money. For example, if you make less than $8,350 in the 2009 tax year, your federal tax rate is 10%. If you make more than $8,350 but less than $33,950 then your tax rate is 15%.

There are a series of calculations you must do to come up with your quarterly tax payments including subtracting your deductions, exemptions, and other credits. These things lower your tax liability and the amount you have to send for estimated tax payments. Use IRS Form 1040-ES to calculate your estimated tax payment and find out where to send your payment. You could face a penalty if you don’t pay enough taxes during the year.

The IRS does allow you to take an above-the-line tax deduction for half the self-employment tax you paid during the tax year. This means you get to reduce your taxable income by that amount whether you itemize or not. In the example above, your gross income would have been $12,000 and you would have paid $1652.40 in self-employment taxes. You would be able to adjust your gross income by $826.60 leaving only $11173.40 subject to federal taxation.

Your state may also have self-employment taxes that you should send in. Check with your state’s department of revenue to find out.

For more information about self-employment taxes, consult your attorney, CPA, or tax preparer.

Book Update #3 - Domain, Outline, Self-Publishing

I am doing so much better working on my book since I ditched the “just sit down and write” method and embraced the “outline on notecards” method. I’m feeling pretty confident that I have the book broken down into digestible parts - Parts, Chapters, and Sub-Topics. My next step is to go through my notecards again ( have about 150 of them) and make sure I’ve completely fleshed out the topic. Then, I’m going to start writing. How exciting!

A few days ago, I purchased a domain that will serve as a pre-launch blog to build buzz for the book and will also service as the promotional site for my book. I still have some work to do before the blog launches, but I’m keeping my fingers crossed to have everything ready by the beginning of July, maybe sooner.

I’m thinking through my publishing options for the book. I will definitely have a digital version of the book available online for download. I’d also like to have hard copies to sell. I’ve been checking out a few self-publishing options - Lulu.com and BookSurge/Amazon - and I’m leaning toward Lulu primarily because of the lower costs and absence of royalties. If you have experience self-publishing, I’d love to hear your experience. What company did you use? Would you use them again?

Make Time For Your Own Projects

I’m all for writers having projects independent of their client work. For example, I’m currently writing a book, plus I have this blog that I (sporadically) maintain. I know plenty of writers who have blogs and other revenue streams outside what they do for clients.

The hard part about having projects of your own is finding time to work on them. You can easily grow tired of writing if you spend all your time on client projects. That leaves you with no time for doing any outside work you have planned. (This is what often happens to me.)

Schedule time to do your own work, just like you schedule time to do client work. If you don’t make time for personal projects, you may never get to them.

What do you to to make sure you have time to work on your own projects?

Get More Work From Your Current Clients

The clients you work with today could lead you to the clients you work with tomorrow. Your clients are likely to have friends and colleagues who also need your services. So, have them pass you around. Just drop an email to a few of your current clients letting them know that you’re available for more work and offer a referral discount if they recommend someone who purchases from you. It’s just that easy.

You Can’t Write a Book in Your Head

I’ve hit a snag in my book writing progress and for days I couldn’t figure out why. Whenever I thought about opening up the document, I’d always find something else to do. Then, today, I figured it out. It’s because I’m trying to write the book the way I write articles.

You see, many people outline their articles on paper before they begin to complete the articles on paper or in a word processor. Not me. I think about how I want the articles to flow and then I start writing. I tried to do the same thing with my book. I thought I could think it through, but if I’m aiming for ~100 pages, that’s impossible. Though I’d written an outline, it was very top level and left me wondering where to start. I know better than that.

I’m going to take what I have so far and transfer it to notecards, then completely flesh out the idea on notecards before I start trying to type the book. I may even do it the way we did in grade school - write the entire book out on notecards. That way, I can arrange, rearrange, and continue to keep a visual picture of what I’m writing. You know, I really can’t believe I didn’t think of this before.

I’m Writing a Book

I’ve been toying around with a book idea for a couple of months and I’ve decided to do it. I don’t want to mention the name right now, but  it does have to do with freelancing.

I don’t really know whether set a word count or page count target. Since I’ve seen many other authors use word count, that’s what I’m going to go for to start. I checked around for some average word counts to get a feel for how long I’d like my book to be. Seven Habits of Highly Effective People (the first book I found that I’m familiar with) is a little more than 100,000 words and 358 pages. I’m thinking my book will be 1/4 to 1/3 of that so I’ll shoot for 100 pages and 30,000 words. There’s my goal.

I have a domain in mind and I’ve emailed the owner about purchasing it. However, I’m not quite sure I want to pay as much as he’s asking. Of course, the purchase is tax-deductible and it’s not a ridiculous amount; just more than I’ve ever paid for a domain. I’ll make a decision within the next few days.

 I’m putting a word tracker in the sidebar to keep you updated on progress just in case I don’t make it back to the blog to make a complete post. If you’ve been looking for a Word Meter/Tracker for your book, here’s a site that shows 6 of them.

Have you ever written a book? How was your experience?

Testing Out Twitter

Somewhere out there I once saw a grand list of freelance writers with Twitter accounts, so I know a lot of you are Twittering. And now, I am, too. I actually started about a week and a half ago, and so far I like it. Right now, I’m using my Twitter personality primarily for my About.com site which is on Credit/Debt Management. I’m thinking about creating an entirely separate one to help brand myself. It’s just an idea though. What about you guys? Are you Twittering? Do you have multiple Twitter accounts? By the way, if you’d like to follow me, I’m @aboutcredit.

FreelanceSwitch’s Monster List of Job Sites

Here’s a link to one of the largest lists of freelance job site listings I’ve ever seen.

Things To Do Before Leaving the Day Job

It’s been more than a year since I had to swipe my badge. Making the move to full-time freelancing wasn’t easy. For me, it was about two years in the making. Most people can’t simply wake up one day and decide you’re not going back to work.

I recently ran across a great blog at My Dollar Plan, a blog run by Madison DuPaix who’s also a fellow About.com Guide (Kids and Money). 29 Steps I Took to Leave the Workforce at 29 details what Madison did to prepare for the big leap. I did quite a few of the things on the list. #2 Save Aggressively was one of the most important steps for me. Because my freelance writing income was nowhere near my take-home salary, I needed a cushion to help cover living expenses.

Something I’d add to the list that’s kind of covered, but not explicitly stated - Spend like you’re already freelancing. If you go ahead and reduce your living expenses while you’re still gainfully employed, you’ll have an easier time transitioning.