The life of a freelancer is not always glamorous. As a freelancer, you are both the boss and the employee and the accounting department and HR. Because this is podcast is about money, we’re going to focus on the accounting department part. In this episode we’ll talk about the difference between an S-Corp and an LLC, how to file taxes as a freelancers, how to track down 1099s, what you can actually write-off your taxes, and a very exciting New York City law that protects freelancers from being stiffed.
Moneysplained is an educational podcast and should not be considered investment advice.

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My first guest is Shane Mason, a CPA and CFP in Brooklyn, New York.  Shane Mason also dropped a whole bunch of knowledge about taxes in Episode 4, so go back and listen there. The simple dollar has a GREAT resource for Freelancers.

Forming an LLC

Interested in the history of the LLC? It’s kinda neat.

 Shane cautioned against forming an unnecessary LLC (especially in New York, where it’s nearly $1,500) unless you’re doing contract work where someone could get hurt.

The W-4 form was covered extensively in Episode 5. Shane says that “People are more complicated than this form.”

USEFUL hack: If you are a freelancer, add a little bit extra on line 6 of your W-4 to put a “down payment” on your taxes. This is really helpful for people who are employed full-time but also have a side hustle.

You might want to apply for an Employer Identification number or an EIN. It’s free from the IRS.

The IRS has pretty weird qualification but this helpful website lists other reasons like keeping you personal social security number off W-9 forms and applying for a separate business bank account or credit card.

The Non-Money Minute

Rest in power Sylvia Porter.

Sylvia Porter was one of America’s first personal finance columnists. She hid her gender writing under the name S.F. Porter for years, while she gained the trust of the American public. She made complicated financial concepts easy to understand for the average person.

I’m reading a fascinating book about her at the moment.

Estimated Taxes

How do I know if I need to file estimated taxes on my self employed income?

You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits. You can pay here. 


This is the form that your employers use to report the amount they paid you to the IRS. You get a copy if you’ve made more than $600 from a single company. If you’ve lost your 1099s, no worries, you can request a copy of these statements from the current year.

We talk about all the things you can and can’t write-off. What is a write-off anyways?

You can also request a wage and income transcript, it’s FREE.

Retirement Plans as a Freelancer

You have many options, so make sure to read about all the plans offered to find one that’s right for you.

Self-Employment Tax

Remember how we said that as a freelancer, you’re both the employer and the employee? Well, you have to assume ALL that tax liability. It sucks. It’s around 15.3% for 2017. Click here for a useful breakdown.

Freelance Isn’t Free!

Annie Levers stops by to talk about an exciting piece of legislation in New York City that protects freelancers from non payment. She’s the budget and policy director for city council member Brad Lander, who was the sponsor on the act.

Check out the Freelancer’s Union, the main advocates for the act.

In a nutshell, if you’re owed more than $800 by a company and it’s 30 days past due (and you have a written agreement), you can file a complaint and get DOUBLE DAMAGES if you win.

The FAQs are really helpful to understand how to file a claim.

The city government has helpfully provided a sample contract, which you’ll need when going after a delinquent employer.  Basically you need to copy and paste the text from this PDF linked HERE.

Thanks for listening!