There is an exciting revolution in careers happening for those who want to be their own boss, set their own hours, and control their own destiny. Welcome to the “gig economy,” a new and rapidly expanding job market.
Nowadays, more and more Americans are becoming part of this employment shift. In fact, according to a CareerBuilder survey, 29% of workers have some type of side gig, especially millennials — 44% of those aged 25-34 and 39% of those between 18-24 report having an extra gig. According to a study by Princeton University, the percentage of workers involved in alternative work arrangements rose from 10.7% in February 2005 to 15.8% by the end of 2015, while employment in traditional jobs increased by only 0.4% during the same period.
Today, being a freelancer, consultant, or independent contractor can mean selling products through a company like Ar-bonne or managing a business from home. Whether you are a recent graduate looking for a job, a retiree seeking extra cash, or a stay-at-home parent wanting to boost savings, there are many advantages to being part of the gig economy. Here are some ways to profit.
What is Your Worth?
When it comes to getting paid, you often can decide by setting your own hours and rates. Explore resources like the Editorial Freelancers Association to learn about the going rates for writing, editing, web design, and more. And if you are working on something more technical that requires specialized knowledge, your work may be worth more; resources like Bee-Wits can help you calculate fair compensation online.
Know Your Numbers
Avoid additional tax assessments and penalties by reporting all income received on your tax return. Do your research and talk to a certified accountant to see if you qualify for deductions. Common deductible expenses include car mileage, subscriptions, and tools, equipment, or services used for the business.
Planning and Protection
With autonomy comes responsibility. Take special care of your independence and income by planning ahead. Many personal insurance policies do not cover incidents that occur when you are being paid to do a job. However, there are options.
“Some insurers offer special policies and endorsements that protect gig economy workers,” says Ann Zaprazny, senior vice president of Commercial Products at Erie Insurance. “We strongly recommend that gig economy workers talk to their insurance agents about their specific needs and situations before taking on risks. Without these coverages, you could end up bearing the costs if, for example, you get into a car accident while picking up a passenger for a rideshare service, or fall victim to theft when your LuLa-Roe inventory disappears from your home.”
Save and Invest
Four in ten freelance workers do not have a retirement account, according to a Small Business Majority survey. Opening an Individual 401(k), a Simple IRA, or a SEP IRA can be a viable way for freelancers to save for retirement. Even saving a little money in a savings account every month can make a big difference. While it may be tempting to spend now, the return can be enormous in the future. Don’t work hard without also working smart. Stay savvy to maximize your earnings and protect your extra income.
Source: StatePoint. Photo credit: (c) beer5020 – Fotolia.com