Am I a Freelancer or a Contractor?

According to U.S. employment law, every freelancer is an "independent contractor," that is, someone who performs a specific service rather than being an employee of the hiring company.

However, in many companies, "contractor" or "freelance contractor" refers to a professional who comes to the client site to perform a specific, time-limited project, while a "freelancer" performs the work offsite. Many freelancers operate both ways, depending on the work available and their own professional goals.

If you work offsite, using your own equipment, there's no question about your status. However, a company employing you onsite must differentiate between contractors and full-time employees for tax purposes, and U.S. law seeks to punish employers who use "contractor" status to hire permanent workers without making required Social Security, Medicare and unemployment contributions.

Health Insurance For Freelancers

Traditionally, one of the main reasons professionals have avoided shifting to full-time freelance work is the absence of health benefits. However, today freelance workers can get health insurance quite easily. Many freelancers join the Freelancers Union, a place where freelancers can pay to enjoy decent rates on healthcare plans comparable to what they would find through large companies.

Taxation and Freelance Work

If you are a freelancer, you are considered a sole proprietor. Other terms commonly used include self-employed, independent contractor and freelancer. Income and expenses related to your self-employment is reported on your 1040 Schedule C. Your clients may send you a Form 1099-MISC in January or February to report total payments for the previous year. Form 1099-MISC is like a W-2. It is used to report income you received for freelance work. The IRS also gets a copy of your 1099s.

*It's a good idea to keep any income not related to your freelance work separate so there is no confusion during tax time.

History of Freelance

Have you ever wondered where the word freelance came from? Its origin comes from medieval history. When all the other knights were employed or out journeying, the kings of medieval lands used to hire mercenaries of neighboring lands. The replacement men all carried their own lances. Therefore, they were referred to as free lances. They worked for the king only as long as was necessary, much the same as freelance workers do for clients today!

The Ups & Downs of Freelancing

Before you branch out into the world of freelancing, there is one question you must ask yourself: do I have self-discipline? That's because there is no time clock or supervisor checking your work. For some, freelancing is an impossible way to work. For others, it's bliss. Only you can decide what method of productivity suits you the best.

Ta-da! You're a Freelancer

Becoming a freelancer is easy. Getting work as a freelancer is a lot harder. Especially if you're just starting out, you'll want to do everything you can to establish yourself as a professional, reliable, talented worker with up-to-date skills and a thorough understanding of the market and clients' needs.

Start with a freelance resume. You'll want to rewrite your existing resume to reflect your new freelance career, emphasizing your skills, any relevant experience, and your ability to work well independently. A freelance graphic designer's resume, for example, will highlight specific projects rather than job titles or organization names -- unless the names are very well known and prestigious.

Your Freelance Portfolio

While a resume is an important first step in marketing yourself as a freelancer, the part employers are probably going to value most is your portfolio. Potential employers want to see what you can do, and whether you can do their job. How do you convince them you can? By showing them your best work.

Many beginners in freelance design make the mistake of trying to pad their portfolios with as much as work as possible, even though it may not be their best work. Some show off their high-tech skills with DVDs and Web slide shows. But remember that employers don't have a great deal of time, and they'd much rather see a few well-chosen pieces in an easy-to-read format, displaying skills that are relevant to the job in hand.

Joining Freelance Communities

If you are interested in becoming a freelance writer, don't hesitate to join freelance communities to feel a kinship with fellow writers and keep current in your field. Sign up in online communities such as mediabistro.com, which will send you media news each day as well job listings and classes that can improve your craft. This site also has a special area called the Freelance Marketplace, in which freelancers can post their availability and experience for prospective employers and ongoing discussions about the field take place.

Effective Electronic Portfolios

Some clients and prospects want to be able to print out your work. Others want to save toner and look at it on a screen. Still others don't care what you do, as long as it doesn't crash their less-than-modern computers. How to cope?

The PDF portfolio is your answer. Adobe's Portable Document Format has been around for many years, can be read by virtually any computer, and allows the creator great flexibility in page layout and display. As the creator of this document, you control what the client sees and doesn't see. Your design niche and target market will dictate the style -- modern, traditional, cute, Goth, whatever.

Many professionals advocate a two- or three-page portfolio attached to an e-mail response to a job listing, with a promise of a more comprehensive version if needed. Even that version should be no more than 10 or 12 pages, with one project per page, displaying your best work and the relevant skills to meet the client's needs.

Creating this marketing tool is a lot of work. One of the side benefits, if you choose to accept it, is the opportunity to go through your past work and file it all in a thoughtful system. (Oh, and please, back up that hard drive, OK?)

Filling the Gaps in Your Portfolio

As you look over job listings for freelancers in your field, you may spot a job that seems great for you -- except the employer wants one piece of experience you don't have. Maybe you've designed Web pages and banner ads, but have never designed an e-mail newsletter. Or perhaps you have a lot of great ideas for product packaging but have never been hired to do such a job because of your lack of experience.

Don't let yourself be limited by the projects you've done in the past. Give yourself an assignment! Create a fictional client and fill in the gaps in your freelance design portfolio by providing that client with your best work. You can have some fun with this -- maybe creating a fake band that needs CD covers, imprinted disk designs and a Web site -- but don't lose sight of your audience. You're doing this project for free to show an employer you can do work that gets paid.

Ghost Writing: A Creative Way to Earn Money Freelancing

A creative way to make money from freelance writing is to be a ghost writer. This could open up an opportunity to get your freelancing feet wet as an author or while doing another type of writing you'd like to break into. What happens in a ghost writing deal means you will earn money for ghost writing, yet whoever employs you will own all copyrights to the material that is produced.

Transitioning from In-house to Freelance

It's a difficult decision to make: do you keep your nice comfy office job or switch to a freelance career and work from home? Most of us love the idea of being our own boss, making our own schedule, and getting paid for doing work we love. However, if a redical shift in employment makes you nervous, try transitioning into the freelancing world by taking on freelance jobs while you are still employed by a company. It's extra work, but you'll build a good reputation and a client base that can sustain you once you decide to take the plunge into full-time freelancing.

The Power of Networking

If you are interested in marketing yourself around town as a freelance writer, make up business cards with your contact information and distribute them at every event you attend. Post your information up on community bulletin boards and offer to write free stories for your weekly paper or community newsletters. A few published stories, even if you did not get paid, go a long way in beginning a portfolio of your work. These are all good ways to put out feelers and get your feet wet in the freelance industry.

Word of Mouth

Build your reputation as a good freelancer. After a project is completed, ask impressed clients to refer colleagues. Explain that your work might benefit them as well. If your client agrees to referrals, make sure to contact the referrals promptly. Don't forget to mention how you received their names when crafting that cover letter or making that phone call. And don't forget to thank your original client!

Joining Freelance Communities

If you are interested in becoming a freelance writer, don't hesitate to join freelance communities to feel a kinship with fellow writers and keep current in your field. Sign up in online communities such as mediabistro.com, which will send you media news each day as well job listings and classes that can improve your craft. This site also has a special area called the Freelance Marketplace, in which freelancers can post their availability and experience for prospective employers and ongoing discussions about the field take place.

Working in the Media Means Devouring the Media

As a freelancer, staying current or fresh in your field means reading everything you can get your hands on. Read magazine, newspaper, trade and Web publications. Think about how each made you feel as a writer. Did the writer connect with you? Look at the visuals. Did the