Have You Considered Self-Employment?
It is getting easier to start your own business given rapid technological advances, increased ability to buy your health insurance, ability to outsource your needs, growth in the sharing economy, and innovative financing choices.
It often gets frustrating to work for others. Your ideas are listened to but sometimes abandoned, your schedule is rigid with many inefficiencies, and you don’t see the upside potential. We have all been there.
Many companies offer flex-time as a perk, and that is increasing due to the pandemic. Having your own business allows you to have maximum flexibility over your schedule and how you work. As long you have access to the internet, you can work from anywhere.
Initially, you will have start-up costs to absorb on low revenues, if any sales at all. Longer-term, your outlook is more promising. According to ZipRecruiter, the national salary average for self-employed workers is $88,400/year as of July 2019, and Freshbooks reports that 24% of survey participants earned over $100,000.
You must file taxes annually and pay estimated taxes quarterly and pay the self-employment tax.
As a self-employed owner, you can deduct certain expenses. However, the recent 2017 Tax Cuts and Jobs Act eliminated some of those deductions. You can still deduct costs associated with your home office, use of a car for business, meals, and health insurance premiums.
As you are accountable for doing your taxes, you are also responsible for your retirement planning. You won’t be entitled to an employer match as you are now self-employed. On the positive side, you may have the ability to contribute higher tax-deferred dollars to your plan.
Essential Characteristics For A Self-Employed Person:
– Not A 9-5 person
– Lifelong learner
– Determined and have been obsessively planning
– Have many skills, including communicating with others and problem-solving
– Need good financial habits, financially prepared and disciplined
– Strong work ethic and ethical
– Can be patient