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Being self-employed can be both a dream and a nightmare.
In this episode of the Sound Design Live podcast I speak with Stephen Fishman, attorney and author of Working For Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants. We answer the following questions:
- What are the pros and cons of being a freelance sound engineer (independent contractor)?
- How do I choose a business structure (sole proprietorship, LLC)?
- How do I handle equipment expenses and rentals that are reimbursed by the client?
- What common tax deduction might I be missing?
- How do I deal with clients who won’t pay?
- What are alternative pricing models (hourly/day rate/project rate) for sound engineers?
- Do I really need a business license?
- How do I keep track of business expenses?
- Can I save money with a Healthcare Saving Account (HSA)? Can I use it for preventative care (massage, yoga)?
- Will Obamacare save me money?
Details from the podcast:
- All music in this interview by Rui Faustino
- Flow is a book by Mihaly Csikszentmihaly. Everyone should read it.
- Tax forms:
- Schedule C: Reports income or loss from a business you operated or a profession you practiced as a sole proprietor.
- W-9: Used to request name, address, and taxpayer identification number.
- 1040: Individual income tax return.
- Tools: TurboTax, iExpensit.
- If a client includes your expenses in their 1099, then you should list them as deductions in Schedule C.
- Covered California
- Fishman’s thoughts about the new public health insurance exchanges:
- Many self-employed people will qualify for tax credits. You can get tax credits to help pay for your health insurance if you are single and make up to $45,000/year.
- A lot of people are in their jobs now because they can’t get healthcare anywhere else. Many people will probably leave their jobs, some will retire early, and some may become self-employed because they will be able to get health care coverage.