Ask MetaFilter questions tagged with self-employment

Is there a threshold for self-employment taxes?

Anonymous — Tue, 06 Oct 2009 15:01:46 -0800

I'm earning maybe $4,000 this year, of which $2,000 is as self-employed. Do I still have to pay around $300 in taxes? I'm wondering about the taxes for self-employment (I'm a U.S. citizen). I'm on track to make maybe $4,000 this year total, I expect to receive $2,000 of that total in the near future for work I did while self-employed.

While the funds will be transferred to my bank account in the country where I am currently located, I was looking at the tax forms and was surprised. Not only are there the "normal" taxes on the 1040 (which may amount to zero this year), but regardless of my total income, I still pay a bit under 15% (around $300, calculated from the $2000) for self-employment taxes above and beyond any other taxes. This would be quite a hit for me -- can anybody please offer some guidance? Is there any respite for self-employed people with a very low income?

What's it like to own a business?

btkuhn — Mon, 03 Aug 2009 18:09:52 -0800

What's it like to own a business? Hi,
I have long been interested in owning and running my own business. I have never taken any steps towards doing so, but my financial situation is pretty good and I'm interested in exploring the idea. I'd like to read accounts of "normal" people who started their own business, purchased a business, or opened a franchise. Success stories, failures, whatever. Can you suggest books, websites, or anything else that would fit the bill?

Resources for growing a home business

acoutu — Mon, 08 Sep 2008 13:09:18 -0800

What are your best resources for growing an established home-based business? I've got a couple of established home-based businesses. I'd like to do more reading about growing them to the next level. I have an MBA, but that focused more on growing high value ventures. I'm interested in turning small businesses into slightly bigger small businesses. I'm especially interested in the transition from "work in the business" to "working on the business" and from owning all the work to letting go and using leverage to grow the business.

Books, magazines, articles, websites, case studies, anecdotal advice -- anything is good. I should emphasize that these businesses are already established, so I'm not looking for help in starting a business. Thanks!

Help this introverted, slightly socially backward artist-type make money.

oceanview — Fri, 08 Aug 2008 22:09:54 -0800

I'm trying to think of some low-skill business ideas. So far I'm looking into dogwalking and housesitting. Any other suggestions? I don't have a driver's license and any references at the moment. I have some savings I could use to invest in a venture. Also, I'm trying to avoid 9-5 and working under someone else, but would consider something which is low pressure, but not mind numbingly boring. I like people, but I don't too well at jobs where I have to interact with "patrons" all day long.

Additionally, I have a diploma in publishing (copywriting, design, web) which I haven't done much with. Can anyone tell me how to get my foot in the door hiring out my services as an editor/proofreader?

On the design front, I've always had the idea to design my own journals, stationery, jewellery...has anyone done this who can give me some tips on how to come up with your own product, get it made and then sell it?

Thanks, people!!

How can I shut my brain up and enjoy my life?

hansbleep — Fri, 12 Oct 2007 21:38:37 -0800

Does anyone else live with the constant feeling things are about to take a turn for the worse? I run my own web consulting company and have had stable revenues for the last two years, with clients I (mostly) love, making much more money than most 23-year-olds I know. I'm happily married, have just rented a great new apartment in Portland, OR, just bought a new Jetta, have several hobbies I enjoy, great friends, etc. Basically, things are going pretty swimmingly in my life right now. However I'm constantly plagued with this creeping fear that things are about to go horribly wrong. This usually relates to contemplating the future - the end of the year, thinking six months ahead, etc. I always feel that the ground is going to fall away from underneath me, and it keeps me from enjoying the moment and my current accomplishments and pastimes. I don't have a lot of specific fears - perhaps that I'll get sick, or that my biggest client will be hit by a bus and stop sending those fat retainer checks every month that support my lifestyle - but generally it's just this unsettled feeling. Am I just being neurotic, or is there something I can do to focus myself and stop worrying so much?

Rent - Now on Broadway (and 170th)

jake — Sun, 16 Sep 2007 00:41:38 -0800

How can a freelancer with a decent but sporadic income convince someone in NYC to rent to him and not just point and laugh? Fellow freelancers, help a brother out!

My fiancee and I would like to move into northern Manhattan from North Jersey in the next year, but my self-employed status will surely complicate things, even though I'm making twice what I did at my old office job, and we're looking at apartments in the same price range as we pay now.

I get paid infrequently from different clients in large lump sums. The money goes into savings, and we transfer some over to checking as needed. Thus, I don't have any sort of pay stubs or "employment verification letters", but we can certainly make rent with no problem every month, and new work is rolling in all the time.

My fiancee makes 30k/year as a computer technician, which wouldn't cut it alone for a 1500/month apartment. She has excellent credit, mine is so-so.

I'm not a registered business yet, so I can't write myself checks and thus prove "steady income". Would that be a wise / legitimate course of action, anyway? What do you guys do, or what would you do?

I'm terrified that strict requirements with most agencies/brokers will mean I'll get rejected outright, even if I have money in the bank. It seems that people around here are way more cautious, even owner-listings on craigslist tend to be very stringent.

The good news is we're not in a hurry - this is not under a strict timeline, just "soon as we can". So any suggestions that require a few months to get rolling will be appreciated as much as any short-term ideas.

Incidentally, any NYC people who help out, if you live in the city, I'll totally take you out for drinks. Hopefully hit some meetups and whatnot, anyway - this move is mostly to increase my happiness, and that means more friends! I'm a shut-in over here, it's got to end.

How do I leave the self-employment world?

Anonymous — Thu, 05 Jul 2007 21:11:05 -0800

How can I prepare myself for the transition from self-employment to regular employment? I’ve run a marketing and business consulting business for about six years, after having worked in marketing for technology companies for a few years. I started the consulting business so that I could have flexibility while pursuing a part-time MBA (completed) and so that I could eventually work from home while I had small children. I don’t foresee myself continuing in self-employment for more than another three to five years -- around the time my kids are settled in school. My work/income is currently only limited by the time I have available -- I've got tons of leads and I turn away a lot of work. However, I honestly don’t want to do what it takes to make a high income in self-employment. I hate having to start from scratch all the time -- building new relationships, going through the sales process, learning about a company and so on. I'm not bad at it, but I really do prefer a regular job.

Right now, I get calls from recruiters who are offering positions that would pay $100k. In three to five years, I’d like to go back to the work world as a product manager, marketing manager or marketing director. (I had previously worked my way up to the manager level.) In three years, I will have more than 15 years of work experience. However, a good deal of it will come from self-employment.

How can I best ready myself for the transition back to a full-time position? I expect that many employers will be put off by my years of self-employment. Moreover, I went through three jobs in four and a half years before that. So I sort of look like a job hopper who preferred to work on their own or who couldn’t get along with people. But that’s not the case. I was working for the same boss at two of those jobs and the third involved contracting for the other two companies. Even today, much of the work I do involves people with whom I previously worked.

My other challenge will be presenting my experience. I can’t really show measurable results. I often just get to work on a piece of a project or my client may decide not to track numbers. For example, two of my biggest clients regularly hire me to do marketing strategies, direct mail campaigns, search engine optimization and so on. But they don’t track results or report them to me...even when I ask. Granted, they keep hiring me, so I’m obviously not disappointing them. Still, I have no idea how many leads, qualified leads or sales my work generates. It’s like this with many other projects. I’m concerned I’ll look junior or that I won’t have numbers to put on my resume.

So what can I do to help myself transition back to work? I’ve got a few years to start putting these things in gear. I'm not worried about references or contacts. It has more to do with the way I position myself and my experience. And, no, I'm not willing to leave self-employment yet. Thanks.

(Anonymous because some clients read AskMefi.)

Why work?

JJ Jenkins — Sun, 11 Feb 2007 09:00:55 -0800

Is it possible to be a well-respected and fulfilled person without having a career? Money is not an issue, other than the fact that it would be nice to make my own for once. But would extra money matter, taking up all my time to make a small entry-level amount?

I went to school for a long time, against my will at first, and then just to finish what I started. I changed majors a few times, never finding anything I wanted to truly immerse myself in. I have MANY interests, and find myself consuming vast amounts of books, movies, plays, magazines, blogs, etc. I'm a very geeky person in that way. When I find something I like, I become obsessed with it for a while, a virtual expert, and then move on to the next thing. I'm not lazy, and I hate that people may think I am.

When it comes to starting a career, I'm just not interested. In an abstract way I think I am only because it was ingrained in me as a child that success is paramount to a good life. I often come up with business plans and go so far as to write them out and pitch them to people, and lose interest in the concept six months later. I know I'm capable, I know the who, what, where, and how, but I have a hard time coming up with the why.

When new friends ask me what I do, their reaction is either one of obvious disapproval though they try to conceal it ("Must be nice."), or outright envy and approval, like, "Why work? You don't have to. Enjoy!"

Can I be considered a worthwhile member of society without having a career? I'm not ready for children yet, and it seems like everyone is waiting for me to "do something." I feel like I'm letting someone down, mostly myself. I can't help but think as soon as I get pregnant I'll have major regrets about not having started a career or business first. I don't know how to work for ME.

Home-based bean counting for maximum profit.

Potloaf — Fri, 03 Nov 2006 00:55:35 -0800

Jaded cubicle monkey seeks internet advice on self-employment in bookkeeping. Can I make a living as a low-end bean counter at home? BACKSTORY: On November 10th, I'll be leaving my current admin clerical job. The separation was quite mutual, as the position I was in formerly belonged to a woman who did in 40 hours what I could do in 5. The boss and I both agreed that this job isn't a good fit, and I gave her my notice.

My original plan was to take on two part time jobs; morning admin clerical for the wake-up call, evening pizza delivery for tip money. I need to make a net income of 76 dollars per day to stay afloat. I then have free time in the middle of the day to focus on my writing or my music, both of which are my true passion.

However, one of my best friends suggested that I start a bookkeeping service. Money math is one of the things that I am most comfortable with, and tax season is like a month-long nerdgasm for me (doing a typical 1040-A/EZ usually requires compensation equal to a case of beer). I am also toying with the idea of going back to school for a degree in accounting.

According to my friend, his father worked with a woman who does nothing but collect invoices/receipts from her clients (mostly construction-based), plug all of the costs into Quickbooks, and generate weekly/monthly expense reports. She charges each company a flat fee of $500/mo for her services, and apparently makes near 10k a month.

This seems like my dream business. I can work out of my home crunching numbers and get paid well for it. Unfortunately, this also seems way too easy to be true, but it's given me the required ounce of excitement to push me into serious research. Another good friend has a father (construction business owner) who is in need of a competent bookkeeper, and I'm planning on giving him a call over the weekend to see what he needs and what he's willing to pay. His wife is currently doing the books, and from all reports, she's fucking them up something fierce.

MAIN QUESTIONS:

- Is this way too good to be true? A mere six clients would give me $3,000 a month, which is great because my only goal here is to make the equivalent of a full-time job at $12/hr, while working at home.

- Do I need any sort of liability insurance for collecting and documenting business receipts?

- Are there certain things that I -cannot- offer to do until I am a CPA?

- Is there even a need for this sort of thing? I'm assuming that professional accountants do this exact same work, only with other tasks on top of it.

- There's a Bookkeeping certificate path at the local community college, for 29 semester units. Almost 10 of those units are a joke, including "Intro to keyboarding", "Intro to 10-key" and "People Skills", all of which I feel extremely comfortable with. Will this certificate, which I can easily get in two semesters, make a huge difference in the quality/profitability of the business?

- All else failing, is there anything similar that I can do from home?

I feel like I'm missing something. I'll add more commentary as I go, I suppose. Thanks so much for any help you can offer. :)

Newly self-employed - how can I prove to my bank I'm a good risk?

altolinguistic — Tue, 15 Aug 2006 08:09:54 -0800

UK Mortgage for the Self-Employed: how to convince the bank I'm a good risk? Also, broker or direct dealing with the banks? Note: I am in the UK and need UK-specific advice.

I've been self-employed (as a translator) for just under 2 years now, and business is good. However, my tax returns don't yet reflect this, and I will soon want to apply for a mortgage (jointly with my SO, who is employed and who would be 'applicant 1'). I have filled in 2 tax returns, one showing a loss (year end Apr 05) and one showing a modest profit (year end Apr 06). I can fairly confidently predict that the profit on my next tax return will be around 4 times the size - and I can show that so far this financial year (from Apr 06) I have invoiced almost 200% of the amount I made last year, and that my expenses are lower. To get a mortgage on the property we have in mind, I'd need to prove income that is more than twice as high as last year's.

Will my building society (Nationwide, where I have been a customer in good standing for 10 years) think I'm a good risk? I keep good records and can produce them if required, to give a picture of my current situation. I don't have an accountant and have been filing my tax returns myself, using the HMRC online system.

Also, would we be better off approaching Nationwide directly (they seem to have competitive mortgage rates at present) or going via a broker? I'm rather ignorant on this point.

I'd be grateful for any UK-specific advice. Many thanks.

Office parenting

acoutu — Thu, 19 Jan 2006 22:02:50 -0800

Parents with home-based businesses -- how do you do it? I've been a home-based, self-employed consultant for many years. I've got a toddler now and I'm starting to ramp up my business again. I'm wondering how other self-employed parents work from home with a toddler at their feet. I'm not planning to work a lot of hours. I can schedule the work during naptime or in the evening. I can do a little bit of work when my toddler is awake, but childcare is the primary focus at that time. The biggest things for me are how to handle new clients who want to meet in person and unscheduled phone calls. I'm not really in a position to go to a meeting for more than an hour, given my childcare arrangements. And I typically only do phone calls during nap time -- but there's the risk my toddler will be in the background.

Hiring someone to do childcare is not an option right now.

Any tips on how to handle this? What works for you and other people you know?

How can I find health coverage for my family?

jasonlatshaw — Thu, 10 Nov 2005 21:21:15 -0800

I was laid off. COBRA is running out. How do I best acquire new health care coverage for my family when my wife is in much needed therapy and taking expensive medication? I was laid off from my previous job in September of 2004, and have continued my medical coverage by paying out of pocket using COBRA ($973/month rising to $1200 in January. .. ouch). It runs out in March of 2006, and I'm working to get new medical insurance in place. My real concern is that my wife is undergoing vital mental therapy and taking prescription medication while working through a diagnosed disorder. I am fearful that no new plan will cover this, as they will term it a "pre-existing condition," and we cannot afford the costs of the treatments out of pocket. I am currently working freelance and doing well enough to not want to get a corporate job unless I have to. Plus I'm hopefully getting into a Graduate School at UCLA, starting in September of 2006. I called my current provider today and they told me once COBRA runs out it's over, no extensions are possible with them as an individual. So I now know I have to go to another health plan provider. Does anyone know what my options are?

How can I harness the power of the internet to get people I've never met to send me gifts?

Grod — Sat, 09 Oct 2004 14:54:30 -0800

How can I harness the power of the internet to get people I've never met to send me gifts?