3 Tools for Freelancers That Will Save You $$$
1. Write Off Your Expenses
Can we talk about write-offs for a minute? If you’re not tracking your expenses as a freelancer you are costing yourself hundreds if not thousands of dollars every year. The way it works (in the US) is the IRS allows you to deduct the cost of work necessities from your taxable income, thereby reducing the amount you owe in taxes.
Things that may count as an eligible write-off for your biz:
💰 Cell phone and internet: a % of your monthly plan and cost for devices
💰 Home office: a % of your rent or mortgage based on the sq footage of your dedicated office space
💰 Desk setup: laptop, keyboard, monitor, mouse, desk, chair, notebooks, pens, decor
💰 Education: online courses, books, workshops, certification programs
💰 Software subscriptions: Adobe, Canva, Sketch, Figma, Later, Grammarly, Planoly, Zoom and all the others
💰 Website: platform costs, domain registration, fonts, Squarespace, Mailchimp, Convertkit, Kajabi, Wix
💰 Marketing: swag, business cards, postcards, flyers, holiday gifts
💰 Accounting: Quickbooks, TurboTax, accountant and tax filing fees
Obviously, I am not a tax professional, so do your own research to determine which write-offs you are eligible for.
So how does one keep track? Paper receipts get lost and so many of our purchases are digital these days anyway. When I was a sole-proprietor, I used Quickbooks Self-Employed to track all my income and expenses. You can set it up to sync with your business banking accounts so that anything you spend on your business is imported and can easily be tagged.
What’s awesome about this tool is it automagically calculates what you owe for quarterly estimated taxes (and reminds you to pay them!) plus syncs with your tax prep software to make your tax return process pain-free.
Use my referral link for 50% off QuickBooks Self-Employed
2. Track Time & Set Up Automatic Invoicing
Who can honestly say that they love creating invoices every other week. I mean… I love getting paid, but I used to find the process of creating invoices stressful and time-consuming.
There are many invoicing tools out there, and I’ve tried just about all of them. My latest discovery is an app called Harvest which combines time-tracking functionality with auto-invoicing features to make dedicated invoice day easy and stress-free. Seriously, I’m never going back to those other tools. Harvest saves me hours every cycle.
Why I love Harvest:
🕒 The desktop app is like a time-tracking assistant. All I have to do is click ‘start timing’ in my toolbar.
🕒 If I walk away from my desk and forget to click ‘stop’, it detects my inactivity & suggests to remove that exact amount of time.
🕒 I can customize my hourly rate for each client or category of work, and it will calculate how much they owe based on how much time I spent, saving me from having to pull out a calculator.
🕒 When it comes time to invoice, I simply choose a client, click 'create an invoice for tracked time' and Harvest automagically creates the invoice for me. All I have to do is review and hit send!
🕒 Clients have many choices for payment method: via direct deposit, Paypal or with credit card through Stripe. This makes it easy for them to pay on time.
If time-tracking or invoicing is a pain for you, I recommend giving this tool a try.
Use my referral link for a 30-day free trial and $10 off your first month
3. Join a Freelancer Collective
This one is for those of you (US citizens) who’ve built a booming freelance career and are looking to offload all the back-office stuff. Collective is a system and suite of tools to help self-employed freelancers save $$$ at tax time. The way they do this is by transitioning your sole-proprietorship (default tax entity type for solo freelancers) into an S Corp (a special LLC for single-member organizations). I’m not qualified to get into the nitty-gritty of the tax law, but basically this kind of setup is ideal for freelancers making over a certain amount because it allows us to save on self-employment tax (currently 15.3% in the year 2021).
Now all this stuff gets complicated if you’re trying to do it on your own. From paying state franchise tax, getting your formation docs set up, calculating what you owe, accounting and filing tax returns… my head spins thinking about all the parts. But what is freakin amazing about Collective is they handle all that too.
What I love about Collective:
💸 They advised me on the pros/cons of transitioning to an S Corp, and ran calculations to help me determine if this switch would save me $$$ on taxes.
💸 They handled all the LLC setup and S Corp formation process, and save all my business identity information in a dashboard so I can reference it whenever I need to create business accounts, apply for sales permits, PPP loans, and stuff like that.
💸 I have a dedicated team of professionals (accounting, law, tax) in a dedicated Slack channel who I can contact anytime I have a question or concern regarding my business.
💸 They handle my business and personal tax returns. Hollah! Now that’s a huge weight off my shoulders.
Use my referral code ‘JLJOVDVOFZ8W’ to get two months free
Bonus: Get that PPP Loan! 💰
If your business was affected during the time of COVID, you may be eligible for a forgivable Paycheck Protection Program loan. This is essentially free money to help cover your payroll costs. Don’t sleep on this one!
Just last week the Biden administration released new rules which make it even easier for self-employed people to get access to these forgivable loans. The deadline to apply is March 31st, 2021.
You can apply for these loans through connections on the PPP website, through your bank, or another lending service. Personally, I use BlueVine to manage these loan requests because they’ve simplified the process and made forms that are easy-to-understand.
Learn about applying for the PPP loan with BlueVine