Death and taxes
The following is an excerpt from my well-loved newsletter Freelancers Only! It goes out every Tuesday at 2:00pm. Want to get it? Sign up here.
Two big blocks for people who want to start freelancing, but don’t, are health insurance and taxes. If you start freelancing full-time, who will take care of your health insurance? And how will you take care of taxes?
These things become big blocks because they feel scary. Nothing in life is certain except “death and taxes.” We’ll have to pay these things, and if we don’t they’ll catch up to us. The thought of not being able to pay either one directly impacts our health and freedom.
On paper, these are simple equations. You can get a quote from multiple insurance providers for a monthly premium, and find out how much you’ll need to pay each month. The same goes for taxes. On paper, you simply need to find the average percentage a self-employed person pays on their income, then set aside that amount each paycheck.
To overcome this, let’s look at the theory. On paper, you’re probably looking at about $4,000-$6,000 per year for health insurance in the United States. Which means you need to clear about $400 per month freelancing. This isn’t impossible, right?
For self-employed taxes, you need to set up a new savings account, and put about 15% of each payment into that account for later. This isn’t crazy, is it?
Sometimes we allow big scary things to stay big scary things. When we map them out on paper, and realize that they’re just a number and just a process. These are things we can figure out.
This goes for a lot of big things. How can you take something big a scary, and turn it into a number or a process?
