I am soooo close to going full-time. I'm just trying to work out the fine details...

My first reaction is congrats on your status!

Secondly, if your accountant is MIA I'd get a new one. If you are going to be self-employed fulltime, you need a good, accessible accountant.

A good accountant can also answer your tax questions. My own experience has been that when self-employed, I can deduct work-related expenses on my taxes. BUT, get some real advice!

I'm no expert, but don't we get refunds because we over pay our taxes through withholding? So the amount of your refund might have something to do with the quarterly estimated taxes that you'll be paying. Personally, I'm still at the amateur level, so my tax has been covered by my hubby's withholdings. I'm hoping to change that for next year!

way to go Jasperd. Congratulations on going ft with freelancing.

We usually get some $$ back at the end of the year but I think that's because hubby is overly cautious. He handles our takes and keeps track of my writing income and our quarterly payments. I suspect he'd rather overpay a little and get us back than get socked with a nasty-year end surprise because of the self-employed income (I have two other businesses as well).

Nancy said:

My first reaction is congrats on your status!

Secondly, if your accountant is MIA I'd get a new one. If you are going to be self-employed fulltime, you need a good, accessible accountant.

Click to expand...

I second this - both points. One thing I remember from being (not very sucessfully) self-employed is that you need to do your own withholding - that is, every quarter you are supposed to pay taxes. And you pay a larger portion of social security than you would if you were working for someone else. Definitely get a good, accessible, reliable accountant.

ps CONgratulations, btw - that's excellent news. Happy for you!

As a self-employed person, you have to pay the total amount of your social security rather than half. The total deduction is just under 15% of your earnings. Other than that, as someone said, you can deduct business expenses (office supplies, office telephone, office computer, mileage to meet clients and interview people, advertising, publications, professional dues, etc.) If I were you, I would find an accountant who deals with a lot of self-employed people and set up a consultation where you can get your questions answered. Your accountant can give you a good idea about what business expenses you can deduct, help you set up the proper categories a tracking system, and explain what kind of documentation you need now before you start incurring expenses. Believe me, it is worth paying for a one-hour consult.

I use Quicken software and enter my expense as they occur as well as all business income. If you tag the expense/income with a category tag, the program allows you to sort your your expenses and income into categories at the end of the year and totals them. Then all you have to do is slot them into the correct spaces on Schedule C (the IRS business form for individual owner businesses).

The accountant can also explain paying quarterly estimated taxes. You don't pay any more tax (except for social security), but you have to take the initiative to pay it yourself rather than having it deducted from your pay.

Don't take my word for this, consult an accountant.

Care to share where you found the insurance? My husband's company is laying off 20% of its workforce, so we may soon be without any.

I think a lot of states offer some kind of health insurance for low income people or families. In Minnesota it's called Minnesota Care and in Wisconsin it's Badger Care. Call up your local social services, or google "(your state) low income health insurance."

FYI:

There's a good article in today's WSJ on what to do when you lose your health insurance. Don't have a link handy, but check it out online.

NC has Health Choice for lower income families.

if you take jobs where they don't take taxes out, you are responsible for paying your taxes. talk to an accountant to go over all your questions--it's vital.