In part one, we covered all the fun parts of freelancing in college, from working for free at the beginning to eventually finding paying clients to even designing your own website. Starting out seems hard, but it’s not an unentertaining process. This time we’re diving into the nitty-gritty details of freelance work. Once you have a place to send clients and at least a working knowledge of where those clients are coming from, it’s time to realize what working for yourself actually means. It’s a bit more complicated than you’d expect.
Set your rate
Now it’s time to get paid. So get researching! Websites like Indeed and PayScale have info on standard wages for your work. You can also ask your professors or talk to someone in Career Services for advice on reputable websites for going rates. However, those prices should be used as references since you’re starting out. If you have limited experience, adjust accordingly. For example, the Editorial Freelancers Association states the going rate for basic copyediting is $30–$40 per hour. If you have limited copyediting experience, expect to earn far less than that. You’ll also need a good invoice template to send to clients. Each invoice should explicitly state the type of work, the rate(s) of service, and the hours worked. If you’re providing several services at different rates, list them—don’t just put an overall total for services. The more information, the better!
Related: Student-Friendly Ways to Make Money in Your Spare Time (Without Getting a Job!)
Learn your ethics
This is one of the least fun parts of freelancing. As a freelancer, you work for yourself, which means you don’t have a legal department like most corporate offices. That means you should familiarize yourself with some simple copyright, permissions, and ethics information. Learn what content you can and can’t reproduce without permission from the person with the copyright. That’s why you always need to get permission to link to and/or show content you previously produced. Even though you produced it, the copyright may stay with the client. Super boring, but it’s exponentially important if you’re freelancing. Know your rights and the rights of your clients. Also, thoroughly read any contracts before you sign them. You need to be highly aware of what’s happening with your work.
Know your tax forms
The least fun part of freelancing: taxes! If you earn more than $400 in a year freelancing, you have to file with the IRS. Because you’re self-employed, your taxes and Medicare and Social Security (FICA) contributions aren’t automatically taken out. If you earned more than $600 from a single client, they will send you a 1099-MISC form by January 31. Beginning freelancers often have more one-offs, usually under $600, but you can also find companies who hire freelancers as 1099 independent contractors. These tend to have a steady inflow of work, but you’re still considered self-employed for these positions.
In some cases, you may end up classified as an employee working part-time for certain clients. They’ll give you a W-4 to fill out and send you a W-2 in January, and your taxes and FICA contributions will be taken out before you receive a check. According to Forbes, a great way to ease up your taxes is to increase the withholdings (enter a zero or one on Line 5 of the W-4) on these types of jobs. Be aware: Job-post sites may take a percentage of your earnings off the top. Unless specifically stated otherwise, this is not for taxes. These are typically fees for using the platform.
Actually filing your taxes
When it comes to actually filing taxes, it starts with a Form 1040, where you fill in all the information on money you earned—all of it, including what you may have earned through W-2 employee positions. You also have to fill out a Schedule C (1040). This breaks down the amount of money you made, what you paid in expenses, and the difference between the two. You do not include what you made as a W-2 employee. You do include both 1099 independent contractor earnings and whatever money you earned without needing the 1099. Once that’s done, you have to fill out a Schedule SE (1040), which figures out how much you owe in self-employment taxes as well as your FICA contributions. You should also strongly consider paying quarterly estimated taxes. You’re excused from this practice the first year because you have no frame of reference from past wages, but if you don’t pay them subsequent years, the fees and back taxes can be exorbitant.
If this all sounds confusing, it’s because it is. Forbes recommends freelancers find a good accountant, which is sound advice. But if you’re a college student who has to file because you made $1,000 this year freelancing, that might be out of your budget. This is when you make friends with an Accounting major who was recruited by H&R Block or look into on-campus tax assistance programs. A good tax program is also a great investment, not just for freelancers but anyone who has to pay taxes (literally everyone).
(Please note: this section serves as an overview of freelance taxes and does not act as tax advice. Should you have any specific questions, contact a tax advisor directly.)
Stay on top of things
To make this whole process easier, keep an accurate account of your income and expenses, preferably in a digital capacity such as a spreadsheet. Have one page for income and another for expenses. For income, put in exact amounts to the penny! Everything listed on your invoice should be recorded on your spreadsheet. Also have columns for the type of position (W-2, 1099, other) and whether you’ve been paid. Group your invoices by tax year, and make sure they’re digitized. For expenses, put in exact amounts to the penny too! Have a column for the type of expense (supplies, advertising, research). Hold on to all your receipts and digitize them the same way as your invoices. Also set aside at least 30% of each payment you receive in reserve for your taxes and FICA contributions. Put it in a different bank account for safe keeping if you have to, but make sure to set it aside so you don’t end up owing money you don’t have when April 15 (or the quarterly deadline) comes around.
Related: Budgeting Basics for College Students, Plus Example Spreadsheet
Even if you never meet your clients face-to-face, freelancing is considered a client-facing role. Your well-crafted website stands as an amazing portfolio and showcases your online literacy. Your testimonials prove your standards and strong work ethic. Successful freelancers exemplify time management, professionalism, detail orientation, and deadline sensitivity. If you can handle the heavier parts of freelancing like taxes and copyrights, college is the best time to get started.
Find more work-related advice in our Internships and Careers section to really solidify your freelancing endeavors.
