Ask HN: Getting started with the logistics of freelancing? | Hacker News Reader

Ask HN: Getting started with the logistics of freelancing?

3 pointsgchucky2 comments

I've never really moonlighted before, but a small project came down the line and I'm up for it. The problem is, I'm having a bit of trouble with the logistics of setting it up, particularly in the way of contracts and legal things. (I'm in the USA, for what it's worth.)

- I've never written a contract before. Are there places where I can get a premade contract for these sorts of purposes?

- If I'm charging by hour, how often should I send an invoice? Are there any sort of invoice templates that are standardized?

- The client and I worked together to come up with a list of items that have to be done, and I estimated times for them. We agreed that they were only estimates and could change, but that I would still charge by the hour. Is this a good plan? Should this be written into a contract?

- A CPA told me that I should receive a 1099 at the end of the calendar year for payments made to me. Do I need to do that on my own, or is it up to the client to do that? Is this step even really necessary?

And if you happen to have any other resources on setting up things like this, that'd be great too.

Talk to a lawyer on the contract. A decent one should cost 2-300 bucks. Inevitably, there are wrinkles where the lawyer will be helpful (when a client wants to control exactly how the IP is assigned, for example). Most of the time you can use your boiler plate, but it's good to start a relationship with an attorney anyhow, so get one. That, and a good lawyer can explain to you why everything is in there, what you can afford to give up, and what you can't. Don't cheap out here.

Another thing you might want to look into is creating an LLC or corporation. Again, the laywer has the right answer for you (Corp vs LLC vs nothing). I happen to use an single member LLC, which is set up as a disregarded entity for taxes. This shouldn't cost more than a few hundred dollars to set up either.

I bill every two weeks. But I'm flexible depending on the client. This is not a big deal. If you're worried about getting paid, you should think twice about taking the client in the first place.

Yes, write your billing and rates into the contract. Usually, there is an attached "Statement of Work", where you describe the scope of the project and billing arrangements in detail. Hourly vs. fixed price is a debate you can have over and over again. There are plusses and minuses for both you and the client to each billing scheme, so think it through. Often it depends on the scope of the project, the budget of the client, and (obviously) the trust between the two of you.

The client will give you a 1099. Or they won't (they may not know they need to, or they forget). In either case, you'responsible for reporting your income properly. Check with an accountant to get the taxes right.

1. The contract should specifically say what was the agreement between you and the client. The key word here is specifically. I've found, that the more specific the contract, the more easily I can justify what is out-of-scope and generate a change request (more money for the project).

2. If you charge by the hour, you should put that on the contract. If going this route, present to the customer at least every week a status report showing what did you complete on the last week, what hours did you spend and have it sign by them. How often do you invoice is part on what agreement you reach with the client, but generally is once a month. Put that on the contract also.

3. Everything should be written in the contract.

4. Hire the CPA. You're good at programming and CPAs are good at tax and accounting. At the end, you'll save big bucks.

Also, if possible, try to incorporate, and can't say what's the best structure for you, but you can expense business related things (like laptop or software) that will help you when you report your taxes.

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