Tax Tips For Freelancers

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When you become a freelancer, you enter an entirely new world divorced from the W-2 reporting system of income for staff employees.

Welcome to the 1099-form universe. This new realm of paperwork is not daunting if you prepare yourself properly. You are basically running your own business. You’ll need to keep much closer track of income and expenses, but the end result could be tax savings greater than if you were an employee.

The concept is not too good to be true. It’s all legal under long-established Internal Revenue Service rules for business deductions. The catch? Make sure you have careful documentation and tax preparation.

You may feel inundated with paperwork–now transferred to a lot of log-ins to computer programs–but that extra elbow-grease is worth it when you realize you don’t owe money on April 15 and may even be due for a refund. You may have to pay smallish amounts in federal and state taxes quarterly, yet that sacrifice is still better than the constant bite out of a paycheck.

Your technique is running a business yourself. Your ally is a savvy tax preparer. Your discipline is careful maintenance of records of business expenses. especially when working with multiple article writers.

Your payoff is more take-home income.

Here are five general guidelines for saving money as a self-employed business operator:

1. Hire a tax preparer experienced in dealing with self-employed individuals and free-lancers — and who is available year-round, not just during tax season, to process quarterly returns.

Get referrals from friends and family on who they use and check the Better Business Bureau Reliability Report on tax preparation services at www.bbb.org

Look for credentials. Ideally, your tax preparer should either be a certified public accountant, a tax attorney or an enrolled agent. All three can represent you before the IRS in all matters, including an audit. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics. Avoid any tax preparers who base their fee on a percentage of the refund.

2. Consider incorporating yourself. Setting up a corporation may be more paperwork for yourself and the accountant, but you then have a structure to channel income through the corporation and save the most money.

Most states have an annual fee for maintenance of a corporation. The money for the fee is well-spent. You will have a corporate return filled out in addition to your personal return. The two are interrelated.

Make sure your employers pay to your corporation, not your personal self, which will add up negatively come tax time. Set up a business checking account for the corporation into which the income is deposited.

3. Keep careful records of your business expenses for the allowable IRS deductions. These include travel (car, airplane, train, lodging), communications, equipment purchases and use, meals while working and anything legitimately related to the completion of your work.

Talk to your accountant about other allowable expenses, such as charitable contributions and medical expenses. There are more than you think.

Meanwhile, keep a careful record of all income. Employers are required to report income above $600 annually via 1099 forms. Sometimes they do not issue these forms, so it is the free-lancer’s responsibility to keep track of income. Even if it’s a one-time, $50 cash payment, you must keep a record of it and report it. If you don’t, there’s a chance it can come back to bite you.

4. Set up a home office. This is a specific area in your home strictly devoted to work.  Most functions and utilities used in a home office are eligible for deductions. This is your workplace.

However, take care not to use the office for non-business purposes. There is a definite separation of work and play here. Again, consult your accountant.

5. Save your tax records. Not only is it required by law, but each year gives both you and your accountant a guide to your income track and business expenses. Better to have too much paper than not enough if there is ever an IRS audit.

Make sure you get a hard copy of tax records, as the standard is electronic filing. Also save records of your checks written for business purposes.

A good accountant is worth his weight in gold. But an accountant is only as good as his client’s record-keeping, which is well worth it come April 15 and all other tax reporting times of the year.

Daily Dose: Everyblock Redesigned, ProPublica’s New Timeline Tech, Cover Letter Tips, AOL Continues Cuts + More News

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For today’s serving of stories, we have some tips on new timeline technology and how to write a killer cover letter. Also from the Future of Journalism desk, we have an analysis on Everyblock’s redesign for increased hyperlocalism, and the scoop on Wall Street Journal’s iPad plan.

Read all the news fit to blog in today’s Ebyline Daily Dose.

TimelineSetter: A New Way to Display Timelines on the Web

“The timeline is a very useful way to visualize sequences of events, and they’re especially useful to orient readers within the complex investigative stories we do at ProPublica. But they’re not very easy to make. As far as we know, there are no good open source frameworks that web developers can use to generate timelines quickly without losing design flexibility. So we made our own, which is debuting today.”

How to Write a Cover Letter

“Learn how to write a targeted, customized cover letter that will get you in the door”

What Everyblock’s Redesign Tells Us About The Future Of Hyperlocal News Sites

“With yesterday’s relaunch, new social elements have been integrated into the site that encourage users to share and interact with their neighbors both online and off. So what are these changes, and what insight do they give us into the future of hyperlocal news?”

WSJ Launching Single-Issue Downloads For iPad

“Looking to get more subscribers for its iPad app, The Wall Street Journal will start selling single-issue digital versions of its morning paper for $1.99 in the iTunes App store tomorrow.”

AOL Folds 30 Brands, Including Politics Daily

“First it was the people. Now it’s the brands. AOL just notified staffers of a major consolidation of its portfolio of content sites, undertaken as part of its merger with the Huffington Post.”

Do’s and Don’ts Of Working With Publicists

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Whether you’re covering an event, interviewing a celebrity, or writing a story on a corporation, there will come a time when you have to work with a publicist. While some would argue that a journalist should try to avoid working with a publicist whenever possible because they have their own agendas, it’s nearly unavoidable, especially if you’re covering entertainment or sports.

It’s a relationship of mutual dependence—you need access to their client, they need you for publicity for their client. This fragile relationship has to be put in perspective, however, because as a journalist, your main priority is getting the story right, regardless of the agenda of a publicist.

Celebrity publicists have gained more power as publications become desperate for celebrity interviews, especially for the cover of magazines. As Lori Berger, an entertainment writer for magazines like Cosmopolitan and Marie Claire, said in an interview with the American Journalism Review:

“I remember years ago, when you were an editor, you had power,” Berger said. “But publicists are now making editing decisions, and I am just astonished by it. It used to be that you were selling the celebrity, but that was it. Now you’re not getting the story you want, or the picture you want, or even the hair and makeup you want, because the publicist approves all that. I always say to publicists now: `I want your job!’ ”

There can be plenty of grey areas when working with publicists, but there are also some very clear Do’s and Don’ts:

DO contact the right publicist
Figuring out who to contact can be tough. For celebrities, the best start is to look up their IMDB profile or WhoRepresents, which will often list which PR firm they’re represented by. Then, call the firm and find out who exactly you should send your request to. Find out if e-mail or phone requests are best. Many musicians list their PR representation on their site. Celebrities often switch publicists, so make sure you have up-to-date information by making a phone call to the firm.

DO NOT take a publicist’s statement as fact
Always make sure to do your own research to verify any information a publicist gives you. If she claims her client’s lip balm is the #3 selling lip balm in the U.S., you need to find that fact from an unbiased source.

DO ask a publicist for access to their celebrity client for an interview.
To get an interview with an actor, musician or athlete, you will most likely have to go through a publicist. Unless you’re personally connected to the talent somehow, you will have to go through the gatekeeper. You can politely send them an email or phone call explaining why their client should be in the publication you’re writing for. Be specific about how much time you would need, and if the interview needs to be in person, by phone, or email.

DO NOT let the publicist answer the questions.
I tend to avoid emailing questions whenever possible. While most professional publicists probably have ethically upright enough to not answer the questions that are meant for their client, but the best way to guarantee this is to do a phone interview instead. Often, the publicist will be on the phone during the interview, so make sure to stay in control of the interview and don’t let the publicist answer questions for their client.

DO be nice and polite
You should never burn a bridge that you don’t have to. If a publicist needs to reschedule an interview, or is aggressive when pitching his or her client, take it in stride. Be polite because you may have to work with him or her again in the future.

DO NOT sacrifice your ethics just to get the interview
Rarely, but sometimes, a publicist may make a request that is unethical. For example, they sometimes request to see the story before it runs in print to make sure their client is described in a favorable light. This was most likely never a part of the agreement for the interview, and you have to be clear that it’s against the editorial policy of the organization you’re writing for. It’s something you should definitely discuss with your editor.

DO keep in contact with a good publicist
Once you’ve worked with a publicist and you find them agreeable, you should feel comfortable keeping in contact with them. If they represent a lot of clients that could fit the type of writing you do, it’s fine to build a professional relationship. “With publicists, it should really be about targeted relationship building instead of cold calling,” Mackenzie Dawson, Daily Features Editor of the New York Post told Businesswire. “My ideal publicist is one who has really gotten to know me over time and has a good idea of the kind of news I cover.”

DO NOT let your friendship dictate your choices
While building a professional relationship is important if you’ll be dealing with publicists in the future, just make sure to keep aware that their agenda is different than yours. Sometimes, they will pitch something that isn’t right for your publication. You should never take a story just to please a publicist.

Asking the Right Questions: How To Craft Killer Q&A’s

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Q&As are the bread and butter of so many working journalists and investigative article writers, especially in entertainment-related publishing. They can seem deceptively simple: ask and you shall receive, right? And oftentimes the general consensus is that they’re somehow easier or require less work than incorporating quotes in a feature-style piece. The tools that help set a Q&A apart from the rest can be elusive but, when employed properly, elevate the standard, time-tested format into a must-read, eye-opening piece.

1.Do your research

You’re telling yourself, “Well, of course!” But preparing for a Q&A interview means really devoting time to learning about the person so that you can engage them in a way that’s not the ol’ I-have-this-to-promote-and-you-have-a-deadline-to-meet transaction. Especially if you’re interviewing someone who is used to the press process, you can set yourself apart from the pack by finding unique bits from their personal history to ask about or mention a smaller, lesser known project that you’re familiar with.

2.Anticipate what everyone else is asking…

…And then don’t ask that. Assume that people read your Q&As specifically because you bring something unique to the table that doesn’t involve spinning a big wheel with questions like “Tell me about what it was like to work on [blank]” and “What are your influences?” on it. There are ways to talk to people about their of-the-moment projects without sounding canned or like an interview robot.

3.Avoid talking about yourself and/or hogging the interview

One of the hardest parts about a successful interview is the need for it to balance somewhere between informal, friendly chat and question-answering session. People can become guarded when being interviewed, naturally, and it’s important to find a way to get them to open up, but remember that there’s a difference between cracking a quick joke (hopefully based off something they said) and telling a five minute story about how you love their band so much because it reminded you of when you were in college and you worked at this great record store that you met your first boyfriend at and… Zzzzzz. One way to think about it is that when looking at the transcribed text of your interview, your blocks of interviewer text should rarely outweigh theirs.

4.Avoid speakerphone and/or interviewing in a loud or distracting location

This is nit-picky and sometimes really can’t be avoided but just the same way that you hate being put on speakerphone by someone when you’re trying to tell them something important, interviewees don’t love the sound of a total stranger’s hollow, faraway voice sounding even more detached. Remember, they’re being expected to share anecdotes and personal information with someone they’ve, oftentimes, never met so try to find ways to limit the distraction and inherent distance between you.

5.Be open to the interview going in myriad, unanticipated directions

The best Q&As to read are the ones that don’t travel in the direction you most expect them. When an interviewer is able to get someone to open up and tell a never-before-shared story from on-set or something even completely off-topic but delightful — like their secret passion for magic or brewing beer in their basement — readers are almost always able to feel that spontaneity in the conversation. You want someone to feel like they’re sitting around having a relaxed afternoon drink with you and this other, very interesting person while you talk. You don’t want them to feel like they’re watching you sweat while moving tediously down a list of thought-out questions, whether they’re reaping entertaining answers or not.

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