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Need some Advice

I've just begun with the whole Freelance writer thing and have a few questions of folks who steps I'm following in.

1. How much do you have to make before you have to claim on taxes? I've heard way too many rumors to just guess.

2. Should I create a small business or can I do this as an individual and my ssn?

3. What are some of the best places to find writing work? I already belong to IFreelance.com but was wondering if there are any other good sites out there (other than craigslist).

Any help or advice would be greatly appreciated.



Aug. 17th, 2008 03:07 pm (UTC)
1. Income is income and you have to add it all up at the end of the year. If you make $10,000 on your regular job (we'll call that your W-2 job) and $100 writing, you will need to declare $10,100. The trick is that your writing income is "Self-employment" income and you will declare it on a different line and you will need to file a Form 1040SE and possibly a 1040 Sch C - Get yourself a copy of turbotax. It will help you work through the details.

The important thing is to track all of your expenses. Your computer, printer paper, home office space, postage, possibly travel - all of these are deducted against your writing income NOT your W-2 income and, at the end of your first few years you may come out with a loss which is deductible from your gross income.

So at the end of the year you might make a $100 and, depending on the tax law at the time, you might not have to declare it. OR you might LOSE $100 and you will want to deduct that.

2. You can do this on your own SSN as a "sole proprietor." There are advantages to creating a small business for it, though. Talk to an accountant or lawyer for more details. Generally, the reason for creating a small business entity is to shield yourself from liability. (.e.g copyright lawsuits, plagiarism lawsuits). As your profile rises, your risks rise.


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