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› › HOME / BUSINESS So You Want to Be a Freelancer (part2)
Article by Elena Fawkner
What Qualifications Does a Freelancer Need?
To be financially successful, a freelancer obviously needs
marketable skills. A freelancer therefore needs the same qualifications, skills and
talents as someone who had been hired as an employee to do the job would need. In other
words, if you are seeking work as a freelance website designer, you must possess the same
skills and qualifications that a full-time employee website designer would possess.
Is a Freelancer Running a Business?
In short, yes. If you do not have an employer, if you have
to source your own work and negotiate your own terms, if you have to chase payment, if you
have to pay your own taxes (i.e. no one is withholding them from your check), you are, in
essence, self-employed. Ergo, you are running your own business.
There are a number of consequences you need to think about.
The first is taxation. You need to set aside from every payment you receive an amount
sufficient to cover your state and federal taxes on the income you receive. Likewise, you
need to keep proper books and records so you can claim the deductions and expenses you are
entitled to as a self-employed person.
As a freelancer, like any independent contractor, you will
also be expected to provide your own equipment and supplies. If you are a website
designer, you need to have your own computer, software and other tools of the trade. The
party hiring you will not provide this stuff for you. Similarly, if you are a freelance
editor, you will be expected to have all the reference materials and style books, word
processing programs and other sundry items any editor would need to do the job.
From a legal point of view, you should also give some
thought to the legal entity of your business. Will you be a sole proprietor or will you
incorporate? If you incorporate, will you choose S-corporation status? There are important
tax consequences of each of these alternatives so be sure to get advice from your
accountant before starting.
Think also about what licenses you may need as well as
insurance (health, life and liability depending on the nature of the work).
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