Resources for Freelancers
Changes in the economy have pushed more and more people into part-time, temporary, and freelance work, as more and more companies cut back on traditional, long-term, full-time employees. Recently the Newshour on PBS had a report by Paul Solman on the problems faced by freelancers in a tough economy — and pointers to some useful resources.
The key resource that Paul pointed to in the segment was the Freelancers Union, an organization that exists to help freelancers buy for themselves the sort of benefits that an employer might offer, such as group health, dental, disability, and life insurance, and a 401(k) plan. I haven't looked over their plans and don't know if they're good deals, but they're certainly worth comparing to your other options.
The group also acts as an advocate, pushing the government to expand the support that employees get to cover freelancers as well. Among their issues:
- Estimated taxes It's not so tough to file your estimated taxes if your income is spread evenly over the course of the year. If your income is variable, though, the estimated tax paperwork is a nightmare — and the penalties for getting it wrong are pretty high. (I wrote a post on this last year: Taxes on irregular income.)
- Self-employment taxes If you're self-employed, you have to pay both halves of the Social Security tax. The Freelancers Union isn't sure that double the tax is a fair burden — and is pushing to get Congress to see it their way.
- Unpaid wages Pretty much every state has a department of labor that will come down hard on an employer who doesn't make payroll — but the state does nothing for freelancers who don't get paid.
- Unemployment insurance Employees who lose their jobs can collect unemployment insurance, while freelancers get nothing.
They've also got some cool posters.