Online Workers Celebrating Their Independence

Linc Wonham — Mon, 27 Jun 2011 15:00:00 GMT

According to a new survey from online employment platform Elance, freelancers are happier working as independent professionals (61 percent) than they are as employees (11 percent), and almost all of them (90 percent) cite the ability to take control of their own schedules as the best part of independent work.

Compensation may also be linked directly to job satisfaction as 47 percent of freelancers saw their income increase in the past 12 months, a number that will likely continue to rise as companies across the globe adopt flexible work models to meet their work objectives and grow their businesses.

"Many workers are seeking more independence in their professional lives," says Fabio Rosati, CEO at Elance. "With businesses increasingly hiring programmers, marketers, graphic designers and administrative talent in the cloud, a growing number of independent professionals who work online are finding opportunities that match their skills and talents."

Additional key findings from the survey include the following:

• Educated Faces of Freelance: Independent workers span across generations (Millennial: 26 percent, Gen X: 42 percent and Boomers: 31 percent). In addition, the typical online freelancer is highly educated: 80 percent of independent workers have a professional degree.

• Job Satisfaction: Freelancers rank high on the happiness scale: 80 percent are optimistic about their career path and 61 percent are happier working as independent professionals than as employees. Working independently is a career cornerstone for the majority of respondents, with twice as many preferring the freelance lifestyle (56 percent) over working full-time with one employer (19 percent).

• Career Reinvention: Nearly 1 in 3 workers began freelancing to be their own boss and work on the type of projects they love. The top benefits of freelancing include the ability to control their own schedule (90 percent), following their passion (87 percent) and eliminating the commute (85 percent).

• The Digital Work Revolution: 92 percent turn to online job sites as their primary method for finding work, and 41 percent indicate they are using social media outlets to land jobs. Only 22 percent use staffing agencies or recruiters and less than 10 percent rely on college job postings or job fairs to find work.

• No Paper Cuts: 65 percent feel that a digital profile, where independent contractors can showcase their talent online with verified work history, multimedia portfolio and tested skills, is more effective than a traditional resume (35 percent) in finding a job today.

• Closing the Commute: 65 percent state that telecommuting is a critical part of their career goals, while less than 7 percent want to work onsite at a company a majority of the time.

Elance conducted the survey from April 29 to May 10, 2011, and more than 1,500 Elance freelancers participated.

Tax Talk for Online Freelancers

Linc Wonham — Fri, 28 Jan 2011 20:30:00 GMT

According to the year-end data from companies such as Elance and oDesk, the freelance Web workforce is stronger today than it’s ever been. This is partly due to an uncertain economy that has pushed many workers into the freelance business, while for thousands of others the decision is based solely on lifestyle preferences.

No matter what the reason, the upcoming tax season will be for many their first experience filing as a member of the self-employed/sole proprietor/freelance community. Below are a few general suggestions to help manage the process over the next two and a half months, as well as some tips for getting a head start on 2011.

Have a check ready
There’s no sense beating around the bush on this one, here’s the bad news first. Perhaps the biggest double-edged sword in the freelancing industry is the fact that your income taxes are not automatically deducted from your earnings by a traditional employer, as most of us are used to. So when tax time rolls around, freelancers generally owe 15.3 percent of their net annual income. If this is the first you’ve heard of this, it’s better to find out now than when the letter from the IRS arrives a few months from now — a letter that, unfortunately, many freelancers before you have been shocked to receive. If you haven’t done so already, start planning today for how you will make that payment in April.

Tips for 2011: Most seasoned freelancers have set up a budgeting system in which roughly 30 percent of their earnings are put away for tax payments – as it’s better to be safe than sorry. Two very wise strategies include putting the money into a savings account where it earns some interest, or the even shrewder move is to start a retirement account which can actually lower the amount you will owe to the IRS the following April. Also, arrange to pay your taxes on a quarterly basis if four smaller payments are more manageable than one larger one.

Know your deductions
If you’re still with us after the last item, here comes the good news. While many freelancers overlook the self-employment tax mentioned above, even more neglect to make the proper deductions they are owed. As sole proprietors, freelancers incur a wide assortment of expenses throughout the year that they can rightfully declare at tax time. If you do all of your work at home, for instance, you are allowed to deduct a percentage of the expenses you put into your home each month such as rent and utilities. Business expenses on software, travel (including mileage on your car for business purposes), books and training, trade shows and networking events, telephone and Internet costs, office supplies, computer supplies, mailing supplies, postage, etc. are all legitimate deductions for a freelancer. However, read the word “legitimate” one more time for good measure, and try to avoid taking deductions for inspirational movies or food and drink that you believe enhances your creativity.

Tips for 2011: If you are not already in the habit, get in the habit of keeping every receipt ever given to you. Regardless of the size or the nature of the expense, this will help condition you so that you don’t find yourself with no credible evidence of the $1,500 investment you made on your business laptop if and when the tax man comes calling. Also, note that the end of the year is a good time for large-scale purchases such as that, especially if you know that you will need something for your work and can acquire it at the end of a year rather than the beginning of the new one.

Get organized
Many freelancers take the previous advice and become diligent receipt-collectors and invoice-takers, only to stuff said materials in random shoeboxes with no rhyme nor reason. If you find yourself in this category, don’t wait until April to try to sort through the piles of papers. Start organizing today, if possible. And if you don’t any have piles of papers because you keep everything on a computer, now is the time to start printing everything and organizing it in an acceptable fashion. Kudos to you, by the way, for trying to limit the amount of paper you use, but if Uncle Sam is anything it’s definitely not green. Paper rules when it comes to dealing with the federal government. Besides, you can keep track of all your printing and ink costs and deduct them on your 2011 returns.

Tips for 2011: There are countless online bookkeeping tools and accounting software available for freelancers today, and it may not be a bad idea to explore some of them if you find that your operation grew at all during 2010. Some of the best ones to consider include Outright, specifically designed for tax accounting, LessAccounting, Shoeboxed and Freshbooks.

Learn your local tax laws
This is not to suggest a second career in law, but it’s always a good idea to do a quick online search into the current laws of your city and state before delving too deeply into your taxes. Some places have very specific rules about income gained through self-employment, and 20 minutes of research on the front end can save you hours of aggravation or even thousands of dollars in cost on the back end. New York City, for example, used to have what it called an unincorporated business tax for freelancers who earned more than a certain amount (I don't know if it still exists), and it behooves you to know those things as soon as possible.

Tips for 2011: If your freelance standing is more than a temporary situation and you consider yourself a sole proprietor for the long haul, perhaps consider something more than the 20 minutes online suggested above. Many community colleges and local public libraries offer fairly in-depth classes and seminars around this time of year for people interested in gaining more than a passable knowledge of their state’s income tax laws.

Embrace the community
Freelancers often feel like they’re detached from the rest of the world when they first enter the industry, but nothing could be further from the truth. The online freelance community is one of the most spirited and loyal groups on the Web, and people are willing to help each other with just about any situation. If you read the first item of this post and are still trying to figure out how to come up with 15 percent of your 2010 freelance income, ask your fellow freelancers what they did in the same situation. There are scores of great blogs devoted to the online freelance industry, and the two companies mentioned in the opening sentence are as good a place to start as any.

Tips for 2011: Aside from your tax questions, most of which will be answered in short order in discussion groups and forums, make this the year that you really embrace the freelance community if you haven’t already. At this time next year, you will find that you not only have a stronger handle on your tax situation, but there’s a good chance that as a result of joining the community you will also have more freelance income to declare.

'Net Features : online workers

Online Workers Celebrating Their Independence

Tax Talk for Online Freelancers