Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don’t take it all.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

If you drive a car, car – I’ll tax the street.
If you try to sit, sit – I’ll tax your seat.
If you get too cold, cold – I’ll tax the heat.
If you take a walk, walk – I’ll tax your feet.

Taxman!

-The Beatles

April 15th… Nobody in the United States over the age of 18 needs to be reminded of the significance of this date. Bleeech.

Freelancing is both a bane and boon when it comes to taxes. It’s good that you are much more in control of your taxation in that you are allowed to make legitimate deductions for your business and therefore adjust your overall income level. While you have to (not SHOULD, but HAVE TO) make quarterly payments to the IRS you don’t have to turn over a percentage of every check you get to them automatically. It doesn’t make a giant difference but why should the U.S. Government get to invest YOUR tax money and get interest from it when you don’t have to file your taxes until April 15th of the next year? It’s also worth pointing out that if you overpay your taxes, which many American’s gleefully do to get that big TAX REFUND CHECK, the government doesn’t include the interest that money would have earned if you’d put it in a savings account instead of giving it to them over the year. I know people who purposefully claim zero exemptions as an employee just to get a “bigger refund”. Huh??? I never could figure out why anyone would be happy about getting ‘money back’, since it was your money to begin with and the government borrowed it from you and paid you back without interest… anyway as a self employed person you can adjust your quarterly payments so you do not overpay and either just cover your taxes or owe a couple of bucks when you file. If you are smart you can take a little money from each job, put it in a money market account and let it accrue interest until you have to withdraw it to make those quarterly payments… it may not amount to much every little bit helps!

The bad thing is that you get an upfront, personal view of how much you actually pay in taxes as opposed to having that invisible hand snatch it from your paycheck before you even see it, and renders it into a number on your 1040 form. Making that quarterly payment drives the impact of the tax levels in this country home and makes you shake your head and think “how can their be a state budget crisis when I am forking out this much in taxes?” or worse yet… you start thinking about the Federal money pit. You also have to pony up the entire amount of tax dough for your social security and Medicare contributions, whereas as an employee your employer has to pay half of it. The U.S. Government calls it “self employment tax” rather than “FICA”, but it’s the same thing.

There are lots of smart things you can do as a freelancer, to help out your tax situation and to better organize and get tax benefits like incorporating or starting tax sheltered SEP funds and 401Ks. I’ve written a few blog posts about these subjects and I thought today would be a good day to post links back to them, as well as to some other resources for self employed folks concerning taxes. Enjoy, and don’t let the taxman get you down!

Self Employment, Taxes and the Benefits of Incorporation

Organizing your Fledgling Freelance Business

Some Freelance Tax FAQ

List of links with tons of freelance tax advice articles

Q: What do you do to keep yourself motivated and avoid burn-out?

A: That’s a tough one, because frankly I don’t stay motivated and avoid burn out. You would think that if you do something you really love to do for a living then working would be like going to a candy store every day. The reality is that no matter how much you like doing what you do, it’s still work and some days you just don’t want to work. I think this is especially true when you do creative work, because while it’s not ‘digging ditches’ it’s mentally and creatively exhausting. Sometimes you just don’t have the creative spark needed to get going. That’s when you find it hard to get to work.

When you are self employed that’s dangerous because you have no boss or other co-workers to hold you accountable if you play hookey… all you have is a deadline and meeting that while doing a good job on the project is all that is really important. It is so easy to just say “I’ll just work harder tomorrow on that and spend today goofing off” when you are not in the mood to work. It’s not easy and it takes a lot of self discipline to combat those moments. The worst thing you can do is hold yourself to some perfect ideal of always working hard and never taking “me time”. That’s like going on a diet and saying you will never cheat. Eventually you will eat that cookie and then you’ll feel guilty which brings you down and you are then more apt to binge on a whole box of cookies. Being realistic and doing things in moderation is they key. You need to accept that you need time off and “me time” to keep sane, and allow yourself to do that without feeling guilty.

There are a few things you can do to try and stay motivated. One is to set smaller goals. If I have a big project I try and set up a series of goal and time line to achieve them, so it’s not this gargantuan task due in a far away future. Smaller, easier accomplished goals make it easier to stay focused. It’s easier to get your head around “I’m going to get three pages penciled out today” than to say “I’m going to have this entire job done by next Tuesday”. Realistic scheduling helps.

Staying motivated to work, at least for me, is mostly about some form of accountability. I work out with a physical trainer not because I really need him to design my workouts and tell me what to do, but because knowing he’s waiting for me at the gym gets me there on the days I am really tired, and he will make sure I do my entire workout and not skip some stuff because I don’t feel like working that hard on a given day. The ‘reward’ of building a better physique is too abstract and takes too long to see results to keep me focused on the here and now. Since there is no one to hold me accountable in the studio, I implement a system of “denial” and “reward” for reaching certain goals.

Say I have an illustration I need to pencil out today, and I am not feeling like working. I’d rather be watching the latest episode of LOST on my DVR. I then choose to deny myself of watching LOST until I get that pencil done, then I have my reward of being able to watch it. My reward might be something as simple as playing solitaire or surfing the web or whatever (not allowing myself to use the computer is one I use a lot). I often give myself a tangible reward for finishing a big job, like some new DVDs or some other toy.

It sounds simple and juvenile but it works. You just have to exercise the self discipline to refuse to allow yourself to get whatever it is you are withholding before you finish your task. It can keep you focused and get you past the distractions that might get you sidetracked.

Thanks to Matt Crawford for the question. If you have a question you want answered for the mailbag about cartooning, illustration, MAD Magazine, caricature or similar, e-mail me and I’ll try and answer it here. I’m running low!