Incorporate. Get an accountant. Buy health insurance. Prepare to pay significantly more in taxes.
> Prepare to pay significantly more in taxes.
And pay them quarterly, which can be done online via https://www.eftps.gov/eftps/
Ask HN: Quitting job to go freelancing
11–20 of 31 posts
Re: Ask HN: Quitting job to go freelancing
#12Save for taxes. You can choose to pay quarterly to make it easier than paying a giant lump sum at the end of the yeaar Also, look into contributing to a SEP IRA (ask your accountant for more info).
Ask your ex-colleagues and coworkers for referrals. Many times my referrals are basically working as a consultant for past coworkers and their new companies.
Don't always work for the money. Give yourself some time to learn new stuff otherwise, you'll burn out and end up treating it like a regular job.
Re: Ask HN: Quitting job to go freelancing
#13The most rewarding parts for me were:
- Being valued for my results
- Having to learn skills in disciplines different than my specialty, such as law, sales, & accounting
- Getting better insight into my productivity/output levels (and being able set my schedule around when I was most productive)
- Solving a variety of different problems
- Never a dull moment!
Have fun!!
Re: Ask HN: Quitting job to go freelancing
#14Incorporate. Get an accountant. Buy health insurance. Prepare to pay significantly more in taxes.
> Prepare to pay significantly more in taxes. And pay them quarterly, which can be done online via https://www.eftps.gov/eftps/
Doesn't this just allow you to pay in 4 payments instead of one? I am not aware that it allows you to pay less.
Re: Ask HN: Quitting job to go freelancing
#15Save for taxes. You can choose to pay quarterly to make it easier than paying a giant lump sum at the end of the yeaar Also, look into contributing to a SEP IRA (ask your accountant for more info). Ask your ex-colleagues and coworkers for referrals. Many times my referrals are basically working as a consultant for past coworkers and their new companies. Don't always work for the money. Give yourself some time to lear…
As long as you're regularly making decent money, 1040-ES is a requirement every quarter and could/might/will be penalized if skipped with a fee the next year after filing taxes.
Roth IRAs are my preferred way to save for retirement.
Re: Ask HN: Quitting job to go freelancing
#16Earlier quoted context omitted.
> Prepare to pay significantly more in taxes. And pay them quarterly, which can be done online via https://www.eftps.gov/eftps/
Doesn't this just allow you to pay in 4 payments instead of one? I am not aware that it allows you to pay less.
All independent and freelance workers are required to pay 1040-ES every quarter and could/might/will face penalties if they don't make payments in a timely manner or underpay. Estimated payments are a way to balance out the taxes you owe to the government.
Re: Ask HN: Quitting job to go freelancing
#17Great decision! I have done the same and not looked back.
The first few years are the worst. You’ll have times when you are worried and want to throw in the towel or just plain overwhelmed. Unless you are destitute and need the money from a full time job - push through this! The freedom on the other side is worth the sacrifice.
- Automate everything you can. Billing, business related payments, etc. Give yourself the option to skip a day or two and not think about it.
- Get a good CPA! Anything you need for the “business” is now a write off. The comments that you'll pay more in taxes are total BS. As an unmarried, childless and non home owning CA resident I lost over 42% of my income to taxes working for someone else. I now have an effective rate of ~25% when you take into account all the write offs.
- Once you establish yourself you can be more selective in not taking clients that tie you to a specific physical location. Accommodating timezones from the other side of the planet is far less demanding when you are doing it barefoot on the beach.
I played the startup game for a long time. I had some mild success but over same timeframe I would have made far more doing my own thing earlier. I now make substantially more than my fancy titled tech job. More so, I work far less and wouldn’t give up my free time to make more. I choose when I work, how I work and to some degree the type of work.
Last thing, don’t listen to the people who tell you it can’t be done or not worth it. I have witnessed a lot of people attempt this and fail with the number one reason by a large margin being succumbing to the doubt instilled by others. Worse, its instilled by people with no experience in doing it themselves or in some cases jealousy. Yes, it will be hard in the near term. Yes, you will have many failures along the way. Shake yourself off and start over. Find other like minded people to learn from.
Re: Ask HN: Quitting job to go freelancing
#18Do it. Life's too short to spend in the cubicle farm.
If you're currently in an expensive place like US/EU/Australia, relocate to a developing country that has good infrastructure and a low cost of living. This way you'll give yourself a much longer runway, and you can decide to work only part time if you want and still live comfortably while having a great work/life balance.
Thailand is a great choice; I've been here several years and know many other people who've done the same thing successfully - I've heard no regrets from any of them. My income is comparable with what I would be earning back home, but for every month of full time work I do I can afford to take two months off. I'm not going back.
Check out the "digital nomad" community, which will give you a lot of tips and advice on this lifestyle. It's not for everyone, but if you're young and single, you have no reason not to try.
Re: Ask HN: Quitting job to go freelancing
#19Save for taxes. You can choose to pay quarterly to make it easier than paying a giant lump sum at the end of the yeaar Also, look into contributing to a SEP IRA (ask your accountant for more info). Ask your ex-colleagues and coworkers for referrals. Many times my referrals are basically working as a consultant for past coworkers and their new companies. Don't always work for the money. Give yourself some time to lear…
As long as you're regularly making decent money, 1040-ES is a requirement every quarter and could/might/will be penalized if skipped with a fee the next year after filing taxes. Roth IRAs are my preferred way to save for retirement.
Both Roth and SEP are great ways to save for retirement and they are not mutually exclusive.
SEP IRAs let you save a huge amount of money (last I checked, a few years ago, it was up to 50k, or 25% of your income, whichever was less) tax free. But you pay taxes when you pull the money out in retirement.
Roth IRAs let you pay taxes now, and then pull money out tax free in retirement (and you can pull out contributions in the meantime if you need).
So, you can hedge your tax exposure in retirement by contributing to both types.
(I am not an accountant or CPA, just a bit of a finance nerd.)
Re: Ask HN: Quitting job to go freelancing
#20> it Quiting job Quiting -> Quitting > change my decition. decition -> decision
thanks for this, not a native speaker :)