Working for Yourself: Law & Taxes for Independent Contractors, Freelancers & Consultants (Paperback)

~ Stephen Fishman J.D. (Author)
Key Phrases: suggested language, optional provisions, written client agreements, Social Security, United States, Stephen Fishman (more...)

Editorial Reviews

Review

"As an independent contractor, you are your boss. This is why Fishman's book is so important." -- New Orleans Times-Picayune

"Comprehensive, current, and savvy... highly recommended." -- Library Journal

"If everything goes well with that new freelance business... then Nolo's Working for Yourself is the only book you'll need." -- Accounting Today

"Walks the reader through the basics of choosing a business form and then deals with start-up concerns, the myriad tax-paying and reporting issues and introductory information on recordkeeping, intellectual property and agreements." -- Minneapolis Star Tribune

"Whether you already work for yourself or are thinking about making the move, Working for Yourself will help make sure it's done right." -- Des Moines Register

Product Description

Be your own boss -- easily, efficiently and successfully -- with this bestseller!

Whether you're an independent contractor, freelancer, or consultant, it all adds up to the same thing: You need to be more aware of laws and taxes than the average person.

Fortunately, Working for Yourself provides all the information you need to stay on top of it all. An independent contractor himself, Stephen Fishman shows you everything you need to know to:

meet business start-up requirements

pick a business structure

set up home or outside offices

obtain permits and licenses

price your services or products

comply with strict IRS rules

establish sound business relationships

avoid unfair contracts

draft good agreements

keep good records

get paid in full and on time

and much, much more

The 7th edition is completely revised to provide the up-to-date information you need, including the most current tax rates and changes in the law.

Whether you already work for yourself or are thinking about making the move, Working for Yourself will help make sure you do it right.

List of Forms

Asset Log

Expense Journal

Income Journal

Invoice

General Independent Contractor Agreement

Contract Amendment

Nondisclosure Agreement

See all Editorial Reviews

Product Details

• Paperback: 384 pages
• Publisher: NOLO; 7 edition (February 10, 2008)
• Language: English
• ISBN-10: 1413307523
• ISBN-13: 978-1413307528
• Product Dimensions: 10.7 x 8.4 x 1 inches
• Shipping Weight: 1.8 pounds (View shipping rates and policies)
• Average Customer Review: 4.8 out of 5 stars  See all reviews (47 customer reviews)
• Amazon.com Sales Rank: #13,154 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

177 of 179 people found the following review helpful:

5.0 out of 5 stars Excellent Book For Understanding Contractor/Freelancer Taxes, July 11, 2003

By	Peter Hupalo (MN United States) - See all my reviews (REAL NAME)

This review is from: Working for Yourself: Law and Taxes for Independent Contractors, Freelancers and Consultants (Working for Yourself) (Paperback)

"Working For Yourself" is a solid introduction to the basic taxes and laws that consultants and feelancers need to understand. The book doesn't cover inventory accounting, cogs, and other accounting/tax topics related to running a product-based business.

"Working For Yourself" discusses basic business structure, including sole proprietorships, LLCs, and corporations. Fishman points out that S-corporations offer an advantage over LLCs and sole proprietorships, if the consultant wants to save some money in self-employment taxes. This is because all net earnings from LLCs and sole proprietorships (up to a wage base of about $85,000) are subject to self-employment taxation. An S-corporation allows part of this money to be paid out as dividends, which aren't subject to employment taxes.

Fishman says corporations don't offer consultants and freelancers as much liability protection as is commonly believed, because the individual is also the one rendering the personal service. And, most lenders to a small corporation will want a personal guarantee that debt will be paid (unless the corporation is well-financed).

Professionals rendering certain services can form business structures unique to professional businesses, such as the RLLP, or registered limited liability partnerships. Clients can always sue certain professionals for malpractice, regardless of their business structure. But, a professional working with a partner shouldn't be unduly subject to suits against the partner for malpractice. These business structures are mentioned, but not covered in detail.

"Working For Yourself" covers these topics very well:

- Self-Employment Taxes
- Paying Estimated Taxes (And Calculating How Much To Pay)
- Dealing with Independent Contractors and 1099-MISC Forms
- Understanding/Drafting Client Agreements
- Insurance
- Worker's Compensation Insurance
- Understanding Who Owns What Rights When An Independent Contractor Creates Intellectual Capital For A Client
- Recordkeeping And Knowing What Documents to Save In Case Of An Audit

Incidentally, Fishman says sole proprietors are one of the most heavily audited business structures. He says this happens because many people claim to operate businesses to get tax deductions, even if they aren't really trying to make money.

Fishman discusses the "hobby loss" rule and how unprofitable businesses can be denied deductions after three consecutive years of losses. However, Fishman points out that if you can show that you really are trying to make money, losses in excess of the typical three years can be allowed.

For example, Fishman discusses Donald, a "golf pro," who the IRS challenged was engaging in a hobby. Donald had lots of deductible net losses. The tax court decided that even though Donald had many years of losses, he really was trying his best to win tournaments and make money. He just sucked at it. And, the losses were allowed.

Other topics are covered more superficially, but the reader is introduced to the basic concepts. Intellectual capital, such as patents, copyrights, and trademarks are touched upon. Also, hiring employees is very briefly discussed. (Fishman is also the author of a book about copyright that sounds really good.)

One section discusses naming your company and the importance of a good name. We're told the French company that decided to market their soft drink Pischitt in the U.S. had to rename it.

"Working For Yourself" has a great discussion showing how much various expenses reduce your income taxes (basically, multiply the expense by your incremental income tax bracket). The book also does a good job showing the kinds of logs you need to keep if you use an item for business and for pleasure.

But, I found one piece of advice that seems a bit silly. Fishman writes: "To avoid having to keep such records, try to use items either only for business or only for personal use. For example, if you can afford it, purchase two computers and use one solely for your business and one for playing games and other personal uses."

It seems you'd be better off just buying one computer and not claiming any deductions for it at all, rather than buying an extra computer you don't need. Suppose a computer costs $1,000. That's how much you spend to purchase your personal PC. If you purchase a business PC for $1,000 also and you're in a net 30% incremental income tax bracket, you save $300 in taxes. Your total cost for both computers, after the business deduction, is $1,700, which is still more than $1,000 for the single PC, if no deductions are claimed. This seems a bit akin to people who don't want to pay off their mortgage because they want to get the tax deduction. Sure, you save some money in taxes, but you pay a larger amount overall in interest.

"Working For Yourself" also includes a good discussion about car expense deductions and travel and entertainment deductions, which many consultants have.

Overall, "Working For Yourself" is a great book for freelancers and independent consultants who want to learn about the basic recordkeeping, taxation, and legal issues of running such a company.

Peter Hupalo, Author of "How To Start And Run Your Own Corporation: S-Corporations For Small Business Owners"

67 of 70 people found the following review helpful:

5.0 out of 5 stars Great for Software Contractors, May 5, 2002

By	Randy Given (Manchester, CT USA) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

This review is from: Working for Yourself: Law and Taxes for Independent Contractors, Freelancers & Consultants (Paperback)

I am a software contractor looking at incorporating. I had looked at LLC options, but some clients require incorporating, so that was ruled out. My best route seemed to be S-Corp. This book answered most of my questions. The "Incorporating Your Business, for Dummies" was pretty good, but not as good as this book. This book has a lot of details and laid some of my worries to rest. It will also save money with your professional team (attorney, accountant) by answering simple, but essential, questions. Definitely worth the money.

24 of 24 people found the following review helpful:

5.0 out of 5 stars The best book on small biz that I have found, July 7, 2001

By	zem (New York, NY United States) - See all my reviews

This review is from: Working for Yourself: Law and Taxes for Independent Contractors, Freelancers & Consultants (Paperback)

After surveying most of the small biz books out there, this is the far and away the best. Fishman claims his focus is on sole proprietors in a service business (in part to not compete with Steingold's Nolo Press book on small biz which isn't nearly as good). Even if you have an inventory based biz, 95% of this book is still extremely helpful. It covers the widest rage of topics and in more depth and with better organization than any other book on the subject. You won't need many other books except maybe something specific for taxes (do not get Nolo's Tax Savy book -- its very superficial; I really haven't found a tax book that I like yet). If your business will be very large and complex (and especially if it will involve other investors, complex financing, employees or IP) also get the Entrepeneur's Guide to Business Law by Bagley and Dauchy.