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How to set yourself up as an independent contractor

How to set yourself up as an independent contractor 2560 1707 Alicia East

If you’re ready to take the leap into working for yourself, you can save some hassle down the line by setting your business up the right way from the beginning. First things first: If you’re confused about whether you are/want to be an independent contractor or a gig worker, we define the difference here. If you’re sure it’s the independent contractor world you want to explore it’s a simple process if you know the steps. 

How Set Yourself Up as an Independent Contractor 

STEP ONE: 

  • Choose a name and decide on the best form of business ownership (e.g. LLC, S-Corp, C-Corp, etc.) for your situation. This will impact many things including taxes and your personal liability. For more info, visit
    www.sba.gov/business-guide
    • Most states have unique license and permit requirements for business registration. This information is readily available online by searching “register a business in <your state>.”
    • No matter where you do business, you need to apply for a federal Employer Identification Number (EIN). You can do so here

STEP TWO: Protect yourself and your business with insurance. Talk to your agent about the following policies:

  • General Liability – protects against claims for personal injury, property damage, associated legal fees, etc.
  • Worker’s Comp – this insurance pays for you and your employees’ medical expenses if they’re injured while working. The amount of insurance required varies by state. Even if you don’t have employees, many companies require their vendors to carry this coverage.

STEP THREE: Banking 

  • It will make your life eleventy billion times easier if you keep your business and personal finances separate. Set up your bank account and get any credit cards you need in your company name. 

STEP FOUR: Marketing 

  • A great way to market your business is through a nice looking, informative website.
  •  For more info, visit www.godaddy.com

STEP FIVE: Equip your business 

  • Independent contractors typically don’t use their clients’ equipment. You may already own everything you need. If not, consider leasing your equipment. 

STEP SIX: Manage your business 

  • Develop an Independent Contractor Agreement. Your larger clients will most likely require you to sign their own such document, but it never hurts to have your own. Either way, this is an important document. Click on the following link to order a state-specific agreement, or do an online search for “independent contractor agreement example” at www.uslegalforms.com
    • Set-up an accounting system for invoicing and receivables tracking. Many independent contractors use Quickbooks or another DIY software but you can also hire an accountant to do it for you
    • Pay yourself and pay your self-employment taxes.

STEP SEVEN: Do something great

  • You did it. You’re in business. Now you can get busy contributing to the world in the ways only you can. 

Still have questions? 

Let us help you. Call PayReel at 303.526.4900 or email info@payreel.com. 

Gig workers ≠ independent contractors

Gig workers ≠ independent contractors 2560 1707 Alicia East

We thought it was time to define two terms that often get thrown around interchangeably but shouldn’t be: independent contractor and gig worker.  Let’s clear up the confusion!  

Gig worker

Merriam Webster defines the gig economy as “economic activity that involves the use of temporary or freelance workers to perform jobs typically in the service sector.”

The service sector piece is one of the main hints that someone is a gig worker. Ride-sharing drivers and grocery deliverers are good examples. Their “gigs” are on-demand. A customer requests a one-time service such as a ride or a grocery cart full of food delivered to their doorstep. The companies, such as Uber and Instacart, facilitate the transaction through an app. 

The gig worker, then, is the person who does the driving or shopping/delivering. They might also be an independent contractor, but it’s not the same thing. 

Independent contractor

Independent contractors are business owners who are hired to do a specific job. They receive payment only for the work they perform. Unlike a regular employee, they pick their jobs and regularly move from client to client.

Here are some of the key indicators that someone is an independent contractor

  • They have a specific skill set and an established business 
  • They report payments as business income and pay self-employment taxes 
  • Their work that is not central to their client’s main line of business
  • Their work is project-oriented and is typically completed in a short amount of time.

Resources for employers and workers (coming up)

Next week, we’ll talk about how to set yourself up as an independent contractor. For the employers trying to walk the line, we’ll talk about best practices for staying compliant while working with independent contractors.

Still have questions? 

Let us help you. It’s our business to keep clients remain compliant.

10 ideas to put a social-distancing spin on Memorial Day Weekend

10 ideas to put a social-distancing spin on Memorial Day Weekend 2560 1745 Alicia East

Memorial Day Weekends of old boasted barbecues, parades, and oodles of red, white, and beer (🤔) everything. The holiday recognizes those who have fought in the armed forces while also unofficially kicking off summer. This year is bound to look a little different even as restrictions ease up. Large gatherings, parades, and public fireworks displays are cancelled. But you know what can’t be cancelled? Kindness. The outdoors. Watermelon. We’ve got all that and more in our list of suggestions for how to celebrate and connect in a different way this year.

10 ideas to put a social-distancing spin on your summer kickoff

  1. Host a watch party with yourselves as the stars: You picked your friends for their shared sense of humor and values. Now’s the time to create entertainment only you and yours can fully understand. Use all your stupid inside jokes and shared experiences to create a satirical mockumentary (like this one for the theater crowd), a commercial for a fictional product, or a music video. Decide ahead of time what the prize will be and how the results will be judged. Everyone should be encouraged to participate: Don’t let production value weigh too heavily in the judging. To get extra fancy and provide a space for all the snark you’d expect from your tribe, host a watch party. If you’d rather not create your own entertainment, conduct a poll and pick a favorite flick to watch “together.” Bonus if you make it 80s themed and add a costume party to the mix!
  2. Have a virtual experience: Everyone from The Bash to AirBnB is offering experiences you can take part in online. If ever there was a time to learn to do magic or cook Spanish tapas, it’s now! You’ve probably had a lot of hot dogs and watermelon in your life. Why not mix it up and go Greek for one of the most patriotic holidays around?
  3. Learn the history: I know I can’t be the only one who has celebrated a holiday without having any real idea why it exists, right? Whether you just want to find out for yourself or you want to turn it into a lesson for your kids, brush up on your Memorial Day trivia.
  4. Host a virtual game night: Incorporate all your new knowledge into a trivia night or coordinate your outfits (a must) for a round of Family Feud or Pictionary. You could also play some improv games like the one where you make up a story by taking turns adding one word or sentence at a time. This one is extra fun because kids can participate (likely with hilarious results) too. However you choose to virtually gather your tribe, have everyone throw in for a cash prize or something silly. I remember a jar of long-expired homemade jarred pickles that made its way through white elephant gift exchanges for decades in my parents’ group of friends. Every year, it showed back up. I can still the seedy green slop now. You never know what beloved traditions could come out of this time.
  5. Virtual bake off: In one of the most wholesome side effects of stay-at-home orders, people are suddenly baking all the things. Selfies in exotic locations have been replaced by bubbly sourdough starter in jars and glamour shots of crusty, drool-worthy loaves of baked perfection. Honor this new pastime with a doughnut or cake-making contest (if you can find some flour, that is) where everyone sends in a picture of the final product. Assign the judges (the younger the better) ahead of time and let all participants watch the judges’ live critique. Take the feel-good factor up a notch by having a $5 buy-in where the winners get to pick a charity to donate to. Thanks Krisi Olivero of Live. Laugh. Film. for this idea and for donating the winnings from your bakeoff to Frontline Foods (a Colorado charity that donates meals to healthcare workers)!
  6. Take a vacation from electronics: I wouldn’t have thought it possible, but I do think we are leaning on technology now more than ever. After all of those virtual gatherings, spend a little time electronics-free. We’re all attached to our devices at the wrist, so it will be a worthwhile challenge. Go for a long walk. Grow something. Have a distraction-free conversation. Even if you think you have nothing left to talk about with those people you’ve been around 24/7 for the last 2.5 months, step into it. Sit with the discomfort of not having something to reach for and see what kind of magic comes from it.
  7. Take a road trip: There’s a weird phenomenon that happens the longer I live somewhere. Colorado was my home for most of my life, but when I was packing up to move, I mourned all of the many attractions that were always a drive away and on my “someday” list. Somehow the longer I live somewhere, the less likely I am to get out and see it. Because life. But with life as we know it on hold and the current state of air travel, now is the perfect time for a weekend road trip to some outdoor attraction where you can still practice social distancing.
  8. Teach your kids (even the littles!) to make their own breakfast: I’ll be tackling this challenge this weekend with my 4-year-old at the helm, her little brother in tow, and the newborn in a carrier. And then, with a little luck, I will move on to one of my most prized holiday weekend activities: a nap.
  9. Make the food anyway! Of course, like so many holidays, food takes center stage at most Memorial Day celebrations. Take advantage of cooking for a smaller crowd! Instead of lining up a bunch of generic patties on the grill, up the ante with some extra special burgers: think homemade sauces and caramelized toppings. There are some stellar vegetarian options, too! And what’s Memorial Day without watermelon? There’s something for everyonefrom the vegans to the meat loversat this Memorial-Day-themed Food and Wine page. Wash your hands a lot while you cook and then deliver some baked goods to a neighbor. Bonus if they’ve served in the military!
  10. Share a thank you card or video: Along the same lines, take a little time to thank someone who has served in the armed forceswhether they’re close to you or just an acquaintance. Some people are really suffering during this time and the little acts of gratitude can do a lot for recipients as well as givers.

Bottom line

I’ve heard from a lot of friends that they’re getting back to some of the simple pleasures of life—sitting down to a meal as a family, dance parties in their pjs, and growing something under the warm summer sun. Get outside, eat some food, and enjoy your family or the quarancrew of your choosing. You may find yourself a little slower to jump in on “business as usual” even when the opportunity comes back around.

4 alternatives to screen time while sheltering in place with kids

4 alternatives to screen time while sheltering in place with kids 610 345 Alicia East

Pre shelter-in-place, I was one of the irritatingly-principled parents who seriously limited screen time to special occasions like a quarterly family movie night. Admittedly, I also found it useful here and there when I noticed smoke from an overcooked bird cascading out of the oven or it felt like the whole house was going to crumble into a heap around me as a result of the sheer volume inside it. In this new reality, as a working parent with 3 littles (all 4 and under), I feel the constant temptation to put the older two in front of a screen so can get a little time in front of mine. I am very grateful for the various sizes of square babysitters I can turn to at any moment. 🤷🏻‍♀️

It’s not all about me though. I want my kids to become fully-functioning human beings with the capacity to do something productive with their boredom, energy, and creativity. Also, I’m fairly confident they’ll still benefit from knowing how to read in our new reality.

3 ways to make the days a little more orderly, happy, and productive—

for kids and parents alike

  1. Make a plan the night before. My husband and I used to have a nightly routine of packing lunches and bags for the following day. We’ve replaced that with planning activities and deciding which blocks of time we will each cover with kids or work, respectively. We never follow the plan exactly, but it sure does help to have a guideline. Since our daughter is learning letters, we start the day by spelling out a word (our theme for the day) with magnetic letters. The younger one identifies the color of the magnets. I have noticed the kids are actually happier when we have a structure (even if it’s a loose one) instead of letting the day just run itself.
  2. Cook together: We enjoy this Kids Cook Real Food program to support cooking together in the kitchen. Yes, you can just wing it, but I have found the structure of this very helpful since my kids are small and need to be guided carefully rather than just set loose with a knife. It also provides guidance for working with multiple age/skill levels at one time so you can be in the kitchen with toddlers (no joke!) all the way up to older kids. I love that it gives them some independence in the kitchen and motivates them to be participants rather than just recipients in mealtime.
  3. Garden: As we mentioned last week, gardening is having a moment. Between sparse grocery store shelves and more time at home, people are growing food for food’s sake as well as for therapeutic reasons. Why not get the kids involved? Of course they love to water the plants, but you can take it further with activities that they will learn from, too. This online resource is geared specifically toward kids.
  4. Water day: Each of the above requires your full attention. A water day, on the other hand, is a great option because a) kids love it; b) some water activities are independent enough that you might be able to catch up on some communication or just get a moment to think; and c) it sets them up for a very long nap. And nap times are more valuable than gold right now.

Bottom Line

I realize that every person’s situation is different. Some are still working the front lines or don’t have a partner to share the load. And some will have to let the screen be the babysitter just to be able to keep feeding the babies. Whatever your situation is, I hope you’ll be patient with yourself and those around you.

As long and trying as this time seems, we will never get it back. Yesterday, my son woke up from his nap and wanted to snuggle. It was a rare moment with just the middle child while the other two were sleeping. I had things to do, sure. I always do. But I left my phone in the other room and sat with him. I told my restless legs–which threatened to carry me away–to be still. I told myself: This 2-year-old in your arms is not an obstacle to all you have to do: Being with him is all you have to do in this moment. So I was. And sure enough, a short time later, he was wriggling out of my arms and on to the next thing. I’m just glad I wasn’t the first one to move on. During this shelter in place, I am determined to look back and know that I did what I could to provide shelter (haven, security, love) for those in my care.

3 new skills to learn for the new reality

3 new skills to learn for the new reality 2500 1667 Alicia East

We can only guess what things will look like on the other side of this. And for me, I can’t spend too much brain space guessing. Not only has my history of predicting the future not proven very accurate, it also takes energy and time away from what’s in front of me in my actual world.

What we do know is that some things simply won’t be the same. Even as restrictions ease up in some places, the virus is still raging and the world is still changing. Some of the changes will stick. Doctor Fauci recommends ending handshaking permanently, for example. The business world was already moving rapidly toward telework and online interaction. Now, you might say it’s Zoom-ing there even quicker.

So what can we do right now to prepare for what’s ahead? The combination of being home more often and navigating a changing world makes now a great time to learn a skill for the new normal. We’ve identified 3 that will serve you well in both business and health.

These 3 skills set you up to adapt to a changing world

Podcasting

As a fairly new medium that democratizes the process of getting heard, it’s been compared to the blogging of 15 years ago. Major bonus during a pandemic: You can podcast from home without fancy gear, other people, or permission from anyone. Also like blogging, podcasting likely won’t be a big money-maker in itself. But if you can get established and find your niche, you can build a platform for your work and products. And a platform? Well that, of course, is invaluable.

I learned the basics–and met some great people virtually–with Seth Godin’s podcast fellowship. It was affordable and got me started with the basic foundational technical knowledge and necessary equipment. It can be as simple as a computer (had it) and a headset (30 bucks). The website says it will be offered again but there are similarly-priced courses available elsewhere. If you want to make a career of producing podcasts, you may want to invest in something that goes deeper. If you’re ready to drop nearly 3K, consider The Podcast Engineering School which will take you deep into the finer points. Keep in mind that you may end up racking up the tab on the other tools of the trade. Think mixers, boom mics and more.

Cyber Security:

Hackers and scammers are not new, but their tactics evolve to every new situation. They’ll come after your credit card info, your identity, and your stimulus money. They can seriously blow your life up. Rest assured (?), if it can happen to Equifax, the government, and Zoom, it can surely happen to you. Becoming a security expert is good for your own financial world, of course. In addition, being able to offer security advice to your clients or employer makes you that much more attractive. Whether or not you’re consulting as a security expert, just being savvy enough not to fall for a scam (like this one, which took a Shark Tank judge for nearly 400K) could save your job and reputation. Udemy offers The Complete Cyber Security Course: Hackers Exposed, along with a boatload of other courses to solve nearly any business challenge.

Gardening 

While you may not think it’ll directly benefit your work, knowing how to garden feeds mind, body, and soul, which pays dividends in every other area. It also helps the environment and ensures you can put food on the table even when the supply chain gets interrupted. P.S. You can’t work if you can’t eat.

You can learn about gardening in any number of ways and many of them are free. It’s also a rabbit hole you could spend your life getting lost in. As a gardener with a couple of years (and a million google searches) under my belt, this particular course by Ron Finley (the gangster gardener) has really piqued my interest. I mean, the man calls air “gangster as f%#k.”

Your investment in Masterclass also gets you access to everything from basketball to acting. You name a skill, it’s probably there. And it’s taught by, well, a master. Even if you don’t plan to become a professional tennis player, you might enjoy learning about it directly from Serena Williams. Surely some insight from one of the greats will benefit you and enrich your life.

Bottom line

Netflix and home haircut tutorials can only take so much of your time. If you’re ready to be mentally stimulated instead of just entertained, there are endless opportunities. What skills have you taken the time to learn with all this extra time at home?