You Thought Adulting And Taxes Were Hard Before, And Then You Decided To Freelance
If you’re of working age, the last year and a half has been a capital-I Interesting time to be a professional person.
From in-person work that was labeled “Essential!” to many white-collar jobs going remote (and some still staying remote after restrictions ease), how we thought about work, our relationship to it, and what we wanted to get out of it… changed.
One of those changes?
The rise in freelancing. From businesses revealing they prefer to “rent, borrow, or share talent” to an increasing percentage of employees who choose full-time freelance (up to potentially ⅓ of all employees), going contract-free is the way to be.
And with that changes what seemed to be one of the major ways of being a capital-A Adult in the world: Having a job.
And of course, all the fun that having a job entails, like paying your bills and filing your taxes.
(Back when I was a kid, I thought having a job would just mean I could funnel all of my money into Magic: The Gathering cards… oh, how wrong I was.)
If your curious about what adulting means to the adults of the world, here’s a survey of 2,000 Millennials, Baby Boomers, Gen Xers, and Gen Zers about what is considered adulting, these were some of the common tendencies:
- Having a budget
- Buying a house
- Filing your own taxes
- Understanding and monitoring your credit score
- Investing in your 401(k)
- Doing your own laundry
- Scheduling regular doctors’ appointments
(And number 19, my personal favorite: Starting the morning with coffee, lots).
But freelancing isn’t on the list. So, we’re in a whole new territory, and I come bearing bad news.
Taxes are more complicated than you thought.
How To Be The Kind Of Freelancing Adult Who Pays Their Taxes On Time
We can start with the easy part: taxes aren’t that fun. And if you haven’t freelanced yet, you may not realize just how unfun they are.
Just think about the last time you filed taxes: did your company send you a nice, automated report that you could hand over to your accountant (or to Mr. TurboTax)?
Well, lucky you.
But if you’re venturing out into the world of freelancing, and you want to approach it like the Adult you are, here are three tips:
File Quarterly - If you’re making more than $1,000 (which, if you’re hoping to pay for rent for at least a fraction of a month, is a reasonable goal), you’ll have to file an estimated tax quarterly. It’s unpleasant, but it’ll make each April a lot more manageable.
Start Tracking Those Expenses - If you thought declaring charitable deductions was fun, now think about all of the things you use for your business… and your personal life… and seeing which of them you bought for pleasure (tasty snacks!) and which you bought for business (oh, these? These are my… business snacks). Keeping that information now will help you tally it up at tax time.
- Enjoy The Freedom - Look, at first glimpse, this isn’t fun. More paperwork. You’ll feel like you’re paying more. And you’ll be paying more often. But you have more freedom. And isn’t that what being an adult was supposed to be about? So reward yourself for having achieved Adult status (you’ll definitely have earned this Adulting IRLA Pack) and grab a drink. After all, your boss isn’t watching (unless you have a mirror in your kitchen!)
Freelancing may not be all long walks during the day and Bali beaches, but there are some perks. What about you - any chance you’ll be working remotely into the future?