Working for yourself: law & taxes for independent contractors, freelancers & consultants

Table of Contents......Page 3
Your Legal Companion for Working for Yourself......Page 8
1. Working for Yourself: The Good, the Bad, and the Ugly......Page 9
Working for Yourself: The Good......Page 10
Working for Yourself: The Bad......Page 11
Working for Yourself: The Ugly......Page 13
How to Use This Book......Page 14
2. Choosing the Legal Form for Your Business......Page 15
Sole Proprietorships......Page 16
Corporations......Page 21
Partnerships......Page 36
Limited Liability Companies (LLCs)......Page 37
3. Choosing and Protecting Your Business Name......Page 42
Choosing a Trade Name......Page 43
Choosing a Trademark......Page 47
Conducting a Name Search......Page 50
4. Home Alone or Outside Office?......Page 52
Pros and Cons of Working at Home......Page 53
Restrictions on Home-Based Businesses......Page 56
Deducting Your Home Office Expenses......Page 60
Leasing a Workplace......Page 68
Deducting Your Outside Office Expenses......Page 70
5. Obtaining Licenses, Permits, and Identification Numbers......Page 74
Business Licenses......Page 75
Employer Identification Numbers (EINs)......Page 76
Sales Tax Permits......Page 77
6. Insuring Your Business and Yourself......Page 80
Health Insurance......Page 82
Disability Insurance......Page 92
Business Property Insurance......Page 93
Liability Insurance......Page 95
Car Insurance......Page 97
Workers’ Compensation Insurance......Page 98
Other Types of Insurance......Page 99
Ways to Find and Save on Insurance......Page 100
7. Pricing Your Services and Getting Paid......Page 103
Pricing Your Services......Page 104
Getting Paid......Page 111
8. Taxes and the Self-Employed......Page 126
Tax Basics for the Self-Employed......Page 127
IRS Audits......Page 134
Ten Tips to Avoid an Audit......Page 137
9. Reducing Your Income Taxes......Page 140
Reporting Your Income......Page 142
Income Tax Deduction Basics......Page 144
Cost of Business Assets......Page 153
Car Expenses......Page 158
Travel Expenses......Page 163
Entertainment and Meal Expenses......Page 166
Health Insurance......Page 167
Start-Up Costs......Page 168
10. The Bane of Self-Employment Taxes......Page 170
Earnings Subject to SE Taxes......Page 171
Computing SE Taxes......Page 172
Outside Employment......Page 173
11. Paying Estimated Taxes......Page 175
Who Must Pay Estimated Taxes......Page 176
How Much You Must Pay......Page 177
When to Pay......Page 180
How to Pay......Page 181
Paying the Wrong Amount......Page 183
12. Rules for Salespeople, Drivers, and Clothing Producers......Page 185
Statutory Employees......Page 186
Statutory Independent Contractors......Page 189
13. Taxes for Workers You Hire......Page 191
Hiring People to Help You......Page 192
Tax Concerns When Hiring Employees......Page 193
Tax Concerns When Hiring Independent Contractors......Page 200
14. Record Keeping and Accounting Made Easy......Page 206
Simple Bookkeeping......Page 207
If You Don’t Have Proper Tax Records......Page 218
Accounting Methods......Page 219
Tax Year......Page 222
15. Safeguarding Your Self-Employed Status......Page 223
What Happens If the Government Reclassifies You?......Page 224
Determining Worker Status......Page 226
The IRS Approach to Worker Status......Page 227
Tips for Preserving Your IC Status......Page 231
16. Retirement Options for the Self-Employed......Page 237
Reasons to Have a Retirement Plan (or Plans)......Page 238
Individual Retirement Accounts (IRAs)......Page 239
Employer IRAs......Page 242
Keogh Plans......Page 243
Solo 401(k) Plans......Page 244
Roth 401(k) Plans......Page 245
Retirement Plans If You Have Employees......Page 246
17. Copyrights, Patents, and Trade Secrets......Page 247
Intellectual Property......Page 248
Copyright Ownership......Page 249
Trade Secret Ownership......Page 256
Using Nondisclosure Agreements......Page 257
18. Using Written Client Agreements......Page 265
Reasons to Use Written Agreements......Page 266
Reviewing a Client’s Agreement......Page 268
Creating Your Own Client Agreement......Page 269
Putting Your Agreement Together......Page 270
Changing the Agreement After It’s Signed......Page 273
19. Drafting Your Own Client Agreement......Page 274
Essential Provisions......Page 275
Optional Provisions......Page 285
Sample Client Agreement......Page 292
Using Letter Agreements......Page 296
20. Reviewing a Client’s Agreement......Page 301
Provisions to Avoid......Page 303
Client Purchase Orders......Page 308
21. Help Beyond This Book......Page 310
Help Resolving Disputes......Page 311
Finding and Using a Lawyer......Page 314
Help From Other Experts......Page 315
Doing Your Own Legal Research......Page 317
Online Resources......Page 320
A. Forms and Documents......Page 322
Asset Log......Page 323
Expense Journal......Page 324
Income Journal......Page 327
Invoice......Page 328
B. Sample Agreements......Page 329
General Independent Contractor Agreement......Page 330
Contract Amendment......Page 335
Nondisclosure Agreement......Page 336
Index......Page 339