The Growing ‘Gig Economy’
Tips to maximize your freelance earningsBy StatePoint
There’s an exciting career revolution taking place for those who want to call their own shots, set their own schedules and control their destinies. Say hello to the “gig economy,” a booming labor market characterized by short-term contracts and freelance work.
Nowadays, more and more Americans are taking gigs. According to a Princeton University study, the percentage of workers engaged in alternative work arrangements rose from 10.7 percent in February 2005 to 15.8 percent in late 2015, while employment in traditional jobs rose by only 0.4 percent during the same period.
A 2016 study conducted by the Freelancers Union and Upwork found 35 percent of the U.S. workforce freelances in some capacity. That’s about 55 million Americans, up from 53 million in 2014. And 29 percent of workers have a side gig, especially millennials (44 percent of 25- to 34-year-olds and 39 percent of 18- to 24-year olds), according to a CareerBuilder survey.
These days, being a freelancer, consultant or independent contractor might mean selling goods online or running a home-based tech support business. Whether you’re a new graduate looking for a job, a retiree looking for extra cash, or a stay-at-home parent hoping to grow your nest egg, there are many advantages to becoming part of the gig economy. Here are a few ways to cash in.
What’s your worth?When it comes to getting paid, many times you set your own fees. Check freelancer and independent contractor websites to learn the going rates for services. For example, free resources include the Editorial Freelancers Association’s website to learn the going rates for layout, writing, editing and Web design services (the-efa.org/res/rates.php).
Know your tax deductionsAvoid 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 what deductions you are eligible for. Common deductible expenses include gas mileage, subscriptions, and tools, equipment or services used for business.
Protection, in caseMany personal insurance policies don’t cover costly incidents that happen when you are being paid to do a job, but there are exceptions. “Some insurance carriers offer special policies and endorsements that protect gig economy workers,” says Ann Zaprazny, senior vice president of Commercial Products, Erie Insurance. Her company advises gig economy workers to talk with their insurance agents about their specific situations before taking on risk. “Without such coverages, you could be on the hook for expenses if, for example, you get into a car accident on the way to pick up a passenger while driving for a ridesharing service, or are a victim of theft when your in-home stock of LuLaRoe inventory goes missing.”
Open a retirement accountFour in 10 self-employed workers don’t have a retirement account, according to a survey from Small Business Majority. Opening an Individual 401(k), a Simple IRA or SEP IRA are among ways self-employed individuals can save for retirement.
Other ways to maximize earnings, at any age