Working for Yourself: Law and Taxes for Independent Contractors, Freelancers and Consultants

Table of Contents......Page 10
1. Working for Yourself: The Good, the Bad and the Ugly......Page 18
A. Working for Yourself: The Good......Page 19
B. Working for Yourself: The Bad......Page 21
C. Working for Yourself: The Ugly......Page 22
D. How to Use This Book......Page 23
2. Choosing the Legal Form for Your Business......Page 24
A. Sole Proprietorships......Page 27
B. Corporations......Page 30
C. Partnerships......Page 44
D. Limited Liability Companies......Page 45
3. Choosing and Protecting Your Business Name......Page 50
A. Choosing a Trade Name......Page 51
B. Choosing a Trademark......Page 53
C. Choosing an Internet Domain Name......Page 56
D. Conducting a Name Search......Page 57
4. Home Alone or Outside Office?......Page 60
A. Pros and Cons of Working at Home......Page 61
C. Restrictions on Home-Based Businesses......Page 64
D. Deducting Your Home Office Expenses......Page 69
5. Obtaining Licenses, Permits and Numbers......Page 78
A. Business Licenses......Page 79
B. Obtaining an Employer Identification Number......Page 80
C. Sales Tax Permits......Page 81
6. Insuring Your Business and Yourself......Page 84
A. Health Insurance......Page 86
B. Disability Insurance......Page 93
C. Business Property Insurance......Page 95
D. Liability Insurance......Page 97
F. Workers’ Compensation Insurance......Page 99
H. Ways to Find and Save Money on Insurance......Page 102
7. Pricing Your Services and Getting Paid......Page 106
A. Pricing Your Services......Page 107
B. Getting Paid......Page 114
8. Taxes and the Self-Employed......Page 130
A. Tax Basics for the Self-Employed......Page 131
B. Handling Your Taxes......Page 134
C. IRS Audits......Page 139
9. Reducing Your Income Taxes......Page 142
A. Income Reporting......Page 144
B. Introduction to Income Tax Deductions......Page 146
D. Deducting the Cost of Business Assets......Page 154
E. Car Expenses......Page 161
F. Travel Expenses......Page 163
G. Entertainment and Meal Expenses......Page 166
H. Health Insurance Deduction......Page 168
I. Deducting Start-Up Costs......Page 169
10. The Bane of Self-Employment Taxes......Page 170
B. SE Tax Rates......Page 171
D. Computing the SE Tax......Page 172
F. Outside Employment......Page 173
11. Paying Estimated Tax......Page 176
A. Who Must Pay......Page 177
B. How Much You Must Pay......Page 178
C. When to Pay Estimated Tax......Page 181
D. How to Pay......Page 182
E. Paying the Wrong Amount......Page 183
12. Rules for Salespeople, Drivers and Clothing Producers......Page 186
A. Statutory Employees......Page 187
B. Statutory Independent Contractors......Page 191
13. Taxes for Workers You Hire......Page 192
A. Hiring People to Help You......Page 193
B. Tax Concerns When Hiring Employees......Page 194
C. Tax Reporting for Independent Contractors......Page 200
D. Special Reporting Requirements for California......Page 205
14. Recordkeeping and Accounting Made Easy......Page 206
A. Simple Bookkeeping......Page 207
C. Accounting Methods and Tax Years......Page 217
15. Safeguarding Your Self-Employed Status......Page 220
B. If the Government Reclassifies You......Page 221
C. Determining Worker Status......Page 223
D. IRS Approach to Worker Status......Page 224
E. Preserving Your Status......Page 229
16. Retirement Options for the Self-Employed......Page 234
A. Reasons to Have a Retirement Plan(s)......Page 235
B. Individual IRAs......Page 237
C. Employer IRAs......Page 239
D. Keogh Plans......Page 240
E. If You Have Employees......Page 241
17. Copyrights, Patents and Trade Secrets......Page 242
A. Intellectual Property......Page 243
B. Copyright Ownership......Page 246
D. Trade Secret Ownership......Page 252
E. Using Nondisclosure Agreements......Page 253
18. Using Written Client Agreements......Page 260
A. Reasons to Use Written Agreements......Page 261
B. Reviewing a Client’s Agreement......Page 263
C. Creating Your Own Client Agreements......Page 264
D. Putting Your Agreement Together......Page 266
E. Changing the Agreement After It’s Signed......Page 268
19. Drafting Your Own Client Agreement......Page 270
A. Essential Provisions......Page 271
B. Optional Provisions......Page 281
C. Sample Client Agreement......Page 288
D. Using Letter Agreements......Page 291
20. Reviewing a Client’s Agreement......Page 298
B. Reviewing the Contract......Page 300
C. Provisions to Avoid......Page 301
D. Provisions You May Wish to Add......Page 305
E. Client Purchase Orders......Page 306
21. Help Beyond This Book......Page 308
A. Help Resolving Disputes......Page 309
B. Finding and Using a Lawyer......Page 312
C. Help From Other Experts......Page 314
D. Doing Your Own Legal Research......Page 315
E. Online Resources......Page 317
Appendix 1: Forms and Documents......Page 320
Asset Log......Page 322
Expense Journal......Page 324
Income Journal......Page 328
Invoice Form......Page 330
Application for Employer Identification Number—Form SS4......Page 332
Request for Taxpayer Identification Number and Certification—Form W-9......Page 340
Appendix 2: Sample Agreements......Page 346
General Independent Contractor Agreement......Page 348
Contract Amendment Form......Page 354
Nondisclosure Agreement......Page 356
Appendix 3: Agencies......Page 360
State Offices Providing Small Business Help......Page 362
State Unemployment Tax Agencies......Page 366
State Sales Tax Agencies......Page 368
Patent and Trademark Depository Libraries......Page 370
State Trademark Agencies and Statutes......Page 372
Index......Page 376
Related Products......Page 398