Thursday, April 2, 2009

A Bookkeeping Solution for Freelancers

A lot of people got into freelancing and sole proprietorships last year. Since the job market tanked, many people took their skills into the open market. That's what America is all about right? Anyone can make money!

But now its tax time. Many of these same freelancers are finding themselves in a pile of debt with Uncle Sam. Poor record keeping has led to disaster because there are no ways to prove expenses, even if they were known. Fear, uncertainty, and doubt has filled the minds of these freelancers.

If you are one of those people, I have a 3-website solution for you:
  1. Freshbooks. This site will handle your invoicing. It keeps things very simple, secure, and accurate. You can invoice based on time and materials, fixed fee, or however else you see fit. You can set up automatic invoicing, and automatic payments. Invoices can be online or the site will snail mail your customers. According to their own data, users get paid an average of 14 days faster than using their old system (whatever that was).
  2. Outright. This site is to keep track of your income and your expenses. It integrates with Freshbooks, so your income side sort of takes care of itself. The expenses are conveniently divided into IRS Schedule C categories, making your life a lot easier at the end of each quarter. Speaking of taxes, they actually estimate your tax payments for you! The site has a "taxes" tab. At the end of each quarter, it will calculate both your self employment (social security and medicare) tax and your business income tax (based on 10% marginal rate on your profit). They are probably on the high side, but its better to be safe and get money back, right? Another great feature is the 1099 calculation, based on you using the "contractors and freelancers" expense category. The site will then make a list of all the contractors you paid at least $600.
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1 comment:

manish.rawat said...

Hi

I am a freelancer and have used many online invoicing applications. I will have to admit many of them are useless but I was really impressed with freshbooks and Zoho. But of lately I have switched to http://www.invoicera.com/

Cheers!!!
Manish Rawat

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