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The surprising cost of working freelance

Get more tax deductions from Uncle Sam
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Get more tax deductions from Uncle Sam

If you're an employee, your company pays half of the tax for Social Security and Medicare. But as a freelancer, you pay the whole thing.

Fortunately, you can offset that new expense with all of the tax deductions you're now eligible for as a self-employed person, Goodman says. For example, you can deduct the cost of your home office, office supplies and insurance premiums.

However, all of these deductions make doing your taxes more complicated. That's why Goodman and Kanarek recommend that you hire a professional to do your taxes.

"I wouldn't even try to do it myself. I would miss deductions," Kanarek says.

Goodman says the best way to find a tax preparer is to ask freelancers you trust to recommend one. You want to make sure it's someone who's had experience preparing tax forms for freelancers. If you don't know others working freelance, you can find them on websites such as FreelancersUnion.org.


 

 

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