The surprising cost of working freelance

Besides buying your own health insurance, you also will need to insure your home office.

"People don't realize that you're not always covered by your homeowners policy," Kanarek says. If that's the case, you'll need to purchase a rider to your homeowners policy for your equipment.

Kanarek advises against shelling out money for a well-appointed home office when you're working freelance. If you don't meet with clients at your office, you don't need the trappings of a cushy office.

"Focus on equipment. Put your money there," she says. The necessities are a good printer, a fast computer and a reliable Internet connection.

Goodman says if you have clients or subcontractors visit you at home, you'll want to purchase business liability insurance, sometimes called trip-and-fall coverage.

She says business insurance can be costly. To find a reliable agent or carrier, get recommendations from other freelancers so you're not oversold on the coverage.