TNE – Ch5 & Ch6 Summary

Clearly this book is awesome!

 Chapter 5 was about taxes and how it relates to freelance designers. I love how it started off by telling us that a good resource is the IRS websites and we should visit the “Starting a business and keeping records” section.

The first major sections said that we are to make quarterly estimated tax payments once we know how much state and federal tax we owe. The form we would use would be the 1040-ES. That tax amount is based on your business expenses and in a situation where you work from home, that space must be used for your business and your business only. What the direct expenses, and expenses that are unrelated were also broken down in that section.  It also mentioned how to find out the deductible for the use of your car. After that it stressed certain deadlines, setting aside a third of all the money you make for your taxes, and knowing your business verses having a hobby.

Chapter 6 touched on how to calculate a freelance rate, which included estimating your billable hours, adding any expenses and bumping up that total to a billable rate. We should look around at others rates so that we can remain a competitor.

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