4 ms·

My intuition is that 1.8 times your salary as a freelancer is not enough to cover your expenses as one and retain the same lifestyle. On the surface it is more

My intuition is that 1.8 times your salary as a freelancer is not enough to cover your expenses as one and retain the same lifestyle. On the surface it is more money, but you're stuck paying your own benefits (health insurance is the big one), and expenses (such as computers, phone, electricity, etc..), and taxes (I use this formula ((Income-expenses)*40%) = how much I need to give the US government. As an aside, if you're too busy, you may consider raising your freelance rates now as a way to generate more income w/ less work.

d23 13y ago
> you're stuck paying your own benefits (health insurance is the big one) Eh, do. > expenses (such as computers, phone, electricity, etc..) A new computer every couple of years is negligible. > taxes Not sure why this would be any different. Were you not paying taxes when you were employed?
- TheCoelacanth 13y ago
  In the US, if you are self-employed, you have to pay an extra 7.65% tax that would normally be paid by your employer.
- reboog711 13y ago
  It is very different having taxes automatically taken out of your paycheck and having to remember to pay them automatically on a quarterly basis. Most people don't realize how big of a chunk gets taken out. And as was mentioned, as a self employed individual you also pay the "employer's" piece of Social Security which is an extra 7.5%. If you're incorporated there may be taxes related to that. I pay a yearly fee for the privilege of doing business in Connecticut. I also must file a yearly annual report with the state; which comes with a processing fee. I also pay property taxes on business property, such as computers and desks and chairs. My accountant has me list all of these. Many people go into sticker shock when I tell them to put aside 40% of their income to pay taxes.

4 ms·

My intuition is that 1.8 times your salary as a freelancer is not enough to cover your expenses as one and retain the same lifestyle. On the surface it is more

by reboog711 13y ago

d23 13y ago
> you're stuck paying your own benefits (health insurance is the big one) Eh, do. > expenses (such as computers, phone, electricity, etc..) A new computer every couple of years is negligible. > taxes Not sure why this would be any different. Were you not paying taxes when you were employed?
- TheCoelacanth 13y ago
  In the US, if you are self-employed, you have to pay an extra 7.65% tax that would normally be paid by your employer.
- reboog711 13y ago
  It is very different having taxes automatically taken out of your paycheck and having to remember to pay them automatically on a quarterly basis. Most people don't realize how big of a chunk gets taken out. And as was mentioned, as a self employed individual you also pay the "employer's" piece of Social Security which is an extra 7.5%. If you're incorporated there may be taxes related to that. I pay a yearly fee for the privilege of doing business in Connecticut. I also must file a yearly annual report with the state; which comes with a processing fee. I also pay property taxes on business property, such as computers and desks and chairs. My accountant has me list all of these. Many people go into sticker shock when I tell them to put aside 40% of their income to pay taxes.