4 Things You’ll Probably Need Help With Once You’re Self Employed
There’s no doubt whatsoever that living the life of a self-employed freelancer is a great way to live intentionally. It allows you to make good money from doing what you love and pursuing your passions while seeking out your own opportunities. No longer need you be constrained by a corporate culture that’s designed to repress your wages and keep you in your place to insulate your employer’s profits. No longer do you have to prove your worth to a boss who radiates self-importance. You’re free to make a living on your own terms.
That said, the self-employed life isn’t all milk and honey. There are some things which your employer may have taken care of for you that you’ll need to handle on your own now. Here are some things that you’ll probably need some help with now that you’re self employed…
1. Your taxes
Depending on where you live, your employer may have managed your tax liability and taken your tax out of your monthly pay on a Pay As You Earn (PAYE) basis. When you work for yourself, however, your tax is your problem. It’s up to you not only to calculate your own liability by weighing your business income against your business expenditure but to set aside a proportion of your monthly income to pay for your tax… Otherwise you could find yourself in for a nasty surprise.
An accountant can be an invaluable resource in preventing yourself from overpaying on your taxes by ensuring that your liability is accurately calculated. The newly self employed can often wind up paying more tax than they’re actually liable for because they’re unsure which purchases are tax deductible.
2. Your health insurance
Unless you live in a country with universal healthcare, it’s possible that your employer also took care of your health insurance. However, when you work for yourself, it’s up to you to find the right policy to suit your needs. Canadian readers can head on over to insurdinary.ca to compare rates and find a quote that’s perfect for their needs and income. You don’t want to overspend on a policy that has unnecessary bells and whistles attached… But you don’t want to sell your healthcare short either. Don’t forget that in certain circumstances you can deduct your health insurance premiums as part of your overall medical expenses.
3. Your bookkeeping
Many freelancers make the mistake of thinking that a bookkeeper and an accountant are the same thing. However, accounting and bookkeeping are very different disciplines. There are some accountants that also do bookkeeping but they are relatively few and far between. If you’re working with several clients at a time it can be tricky to keep track of the income that’s coming in, when payment is due to your vendors and how much you need to set aside to cover your tax liability. A bookkeeping service can help you to keep your financial affairs in order for more accurate accounting.
4. Your productivity
Finally, believe it or not there are some benefits to having a boss looming over you at all times. It keeps you productive and on task. When you work for yourself (especially if you’re working from home) you need to be able to keep yourself on task at all times if you’re to easily meet your deadlines. Therefore, it’s up to you to remain disciplined… But it may also help for you to install some distraction blocking software on your computer during your working hours.
Once you have a little help on your side, it’s much easier to walk the free path of a freelancer.
Are you self employed? Any tips and tricks? Comment below!
[a contributed post]