Are you going to freelance now? Good advice: Create your own business and incorporate it. It can be a one-person deal or if you decide you want to hire your buddies, you can make it a traditionally structured company with officers and partners.
We’re trying to get a tax attorney or some other expert to do a Q&A with us here to explain the many benefits of incorporating or forming an LLC — a limited partnership — for your business as a freelance journalist or writer (or photog, artist, etc. Though most photographers are way ahead of writers and editors on this front).
There are many tax advantages to this plan, not the least of which is tax relief: You can maintain a home office and deduct the cost of running it from your taxes.
Think back: All those calls you made, the travel time, and all the time you spent on a computer at someone else’s expense now becomes your expense — and yours to write off. You can write off one of the meals you eat if you’re meeting a client. (Your own.) You can write off part of a cell phone bill, your DSL bill, hardware (a new computer or fax machine; printer and paper) and a number of other things. (Start keeping receipts and a work log or calendar.)
Other advantages are legal: A corporation will give you some protection against, say, a subject who thinks they were wronged and who sues you. They could sue for your company money, but wouldn’t be able to touch your personal stuff, in most cases. (Not all; more on that when we get our expert up here.)
We’ll find an expert soon to help with the Q&A, but until then, talk to your own tax preparer or accountant, or your attorney if you have one, about the many advantages of creating a company and incorporating. It’s simple, the forms are online and it’s not terribly costly to file.
And a word from the webmaster: Keep checking back here, and please jump in with comments about this site. We’re here to help you — what do you want to see us address?