What is a Freelancer?

business economy

A freelancer is a person who is self employed. Freelance work is used in many different professions, but most commonly a freelancer works in the fields of writing and editing, photography, web design, graphic arts, or computer programming. In any given profession, freelancers sell or contract their work to a client rather than being employed by a business.

A freelancer's career commonly begins with a business or agency at which the freelancer gains experience and contacts in a particular field. Often, talented freelance professionals leave their place of employment because their services are in great demand and they can receive better pay as a freelancer. A freelancer can work at home, in the community, or at their client’s place of business.

Businesses find many advantages in using freelancers. A business that needs particular work done, such as copywriting, can use the services of the writer only as needed. This is ideal when the business requires sporadic work or a one time project. The company is not obligated to provide steady work as it would be for a full time employee. Hiring a freelancer is also economical for a business because the business does not have to provide benefits such as health insurance, personal and sick days, or retirement benefits.

There are also many advantages for a freelancer. A person who is self employed can usually choose their own work schedule. Income may be greater than when working for an employer. A freelancer is his or her own boss and has the freedom to work independently, usually from the comfort of home. Freelancers also have the opportunity to pick and choose which jobs are of interest.

The down side to being a freelancer is that one must keep track of one's own books. This requires a lot of self discipline in order to fulfill tax requirements, time management and health and retirement factors. Another disadvantage is that it may be difficult to maintain a steady stream of work. A freelancer is responsible for finding and winning projects. Sometimes, convincing a client to hire a particular freelancer can be a job in itself.

There are many websites that offer to connect clients with a freelancer. These services often have many freelancers who bid on particular projects that clients post. Other services simply post projects and allow freelancers to submit a resume and samples of previous work. A freelancer often can find projects through word of mouth, from a former employer, or from classified ads in print as well as on the web.

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10
I will be starting to perform work for a small business owner. In order to operate legally, we have agreed that I will receive a 1099 at the end of the year so that I can include it in my income tax and she can deduct it from hers. I did not consider how this would affect my social security. Can you advise me as to what steps to take or whom to contact? Thank you.
- anon39184
9
I have worked at a medical office for 3 1/2 years, first i started as a medical assistant with the W2 form last year they promoted me to billing and coding they paid me 1/2 a year of 2008 with W2 and the next 1/2 with 1099 form and this year they said that they were going to stay with the 1099 form. I have a punch card i have to be there at 8.45am and leave at 5pm and have one hour lunch, they also said that i have to wear a uniform which they are providing 2 and if i want more i need to buy them exactly and how they want and they also are saying the color of shoes i need to wear.

Is this legal for them to do this? They have mentioned to me that i'm a self-contractor. Do I need a tax id # for me to be a self contractor? please give any advice. what do i need to do? I do not want to be on a 1099 form.

- melgar1222
8
Does a non-profit townhouse association have to give a 1099 to the individual who mows our lawn if he has a tax ID# for his lawn-mowing business?
- anon32661
7
anon22261,

If you have been there 3 yrs and he has always paid you cash with no tax docs filled out or given to you, you were obviously an "under the table" employee. While not legal for either of you, I would not accept this for any past work.

If he wants to "start" reporting your future income and giving you a 1099, tell him that's fine. But understand he will save money because your income has now become a deductible expense for him. Meanwhile, you will lose money since a 1099 will require you to claim this income and pay SS and income taxes etc...

You should demand the approx equivalent of taxes (25%) in the form of a raise so your "bring home pay" will not decrease. Anything less would be a cut in your pay.

billf54,

There is nothing to worry about as long as you are given the "1099-S" form. This form is used so the Payer can claim reimbursements, they aren't necessarily taxable to the payee. Much like your scenario.

- anon28358
6
I have worked part time at a small coffee hut for approx 3 years and have never filled out any type of employment papers including W2, I-9 or 1099, I have only been paid cash and now the owner wants me to fill out either an I-9 & or a 1099. I am afraid I will now have to pay taxes that I wasn't planning for or is there an amount earned where you don't. Again I never received checks indicating taxes have been taken out it's only been cash and this all seems a bit strange now. Any advice?
- anon22261
5
billf54: i believe they can do that, however, consult your accountant if possible. if they choose to report it that way, be sure to retain copies of all receipts as you can deduct those expenses as business expenses. you'll need all the deductions you can get at tax time!

- olittlewood
4
I'm working as a freelancer for a doctor. To make things easier i have been purchasing materials for the work needed. I turn the receipts over to them and give a billing statement to be reimbursed for the money I've spent. Now I'm being told that I will receive a 1099 not only for the wages I earned but for the materials as well. Is this legal?? I will be paying taxes on income i never earned!!! Please help.
- billf54
3
i want to be a freelancer. what steps should i take for this purpose> what are the things should i do?
- anon4916
2
I am currently employed as a freelance-to-hire for a major corporation. I am rather new to this and haven't really kept track of my income from the company. My problem is that I have had to use the money I had saved for taxes for vehicle repair costs. My concern is what happens tax time if I do not have enough money to cover my taxes? Does the IRS offer a payment plan? I am fairly certain that I won't have the money and want to do my best to comply.
- anon3414

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Written by J.Gunsch
Last Modified: 22 October 2009

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