nurturing your business Archives

Tax Time Tip: How to Deal with 1099s in Your Small Business

April 10, 2023 by Tanya Brody 2 Comments

This post was originally written in 2017. However, most of the information dealing with a 1099 from your clients or for other freelancers and small business owners is still the same. If you have questions about a 1099 you’ve received, or whether you need to issue a 1099 to someone you’ve paid for freelance or contract work, please consult a Certified Public Accountant (which I am decidedly not.)

Okay, it’s the beginning of April which means tax season is in full swing. For those who are way ahead of the curve and have already filed taxes for this year, yay you. Nicely done, now go enjoy a well-deserved break.

For the rest of us small business owners who habitually put this task off until the last minute, here is a useful, easy-to-understand, humorous post about 1099s. These tend to be the forms that affect us the most. And they can be confusing.

Running your own small business is a lot of work. I’ve done it for most of my working life. Taxes tend to baffle me personally, but there are a few things I know that are very important when it comes to filing mine.

I figured I can’t be the only person who wonders about the great mysteries of filing taxes, so I decided to write this post. I hope it helps you, as you try to figure out this part of being a small business owner.

First, let me state upfront that I am not an accountant. I don’t answer tax questions. In fact, I ask my accountant tax questions regularly, including for this blog post. If you have questions after you read this post, I recommend you talk to an accountant or call the IRS.

That being said…

What is a 1099?

A 1099 is a tax form that you receive for certain types of income. These range from cancellation of debt and interest income to social security benefits. Each type of 1099 has its own designation. The one that concerns most small business owners is the 1099-MISC, which is used to report non-employee income.

If you’ve ever been an independent contractor or freelancer (like me) you’ve probably gotten these before. It’s a form with your information and the information of the company you worked for at the top. Then it shows a whole bunch of empty boxes, and one box filled out with how much that company paid you.

Thanks to the IRS for this example of a 1099-MISC.

I know, it seems like a lot of work for one little box. But it makes the IRS happy, which is always in your best interests.

Your 1099 tells the IRS that you were paid a certain amount, usually “non-employee compensation.” There are a bunch of other possible reasons you could receive a 1099-MISC. For instance, maybe you earned rental income or royalties. Or you received a “golden parachute” payout, or punitive damages award from a court case.

If you want more information on everything a 1099-MISC can be used for, I recommend checking out the IRS instructions for filling one out.

Who Should Get a 1099-MISC?

If you worked as an independent contractor or freelancer for a company and that company paid you $600 or more, you should receive a 1099-MISC from that business. Yes, this is true, even if that company is another solopreneur or one-person small business, like you.

By the way, that means if you worked with a freelancer or fellow small business person and you paid them $600 or more, you may need to fill out and send them a 1099-MISC.

Why do I mention this? Because we’re small business owners. We have a heck of a lot of other stuff on our plates and sometimes it doesn’t occur to us that we need to deal with these forms. We do. It’s good practice for our own businesses, and it’s helpful to everyone we work with, to make sure we’re all on the up-and-up when it comes to reporting income to the IRS.

I’ve filled out and sent 1099s for various companies I’ve owned. It’s not that complicated.

You can order the forms from the IRS here.

The above link also has information about filing those forms electronically, which is a new, free service as of January 2023.

Once you have the forms, you fill in your business information at the top, along with your social security number or employee identification number (EIN). You do the same for the person you paid. Then you enter how much you paid that person in box 7, titled “non-employee compensation.”

You submit Copy A of your 1099-MISC, along with form 1096, to the IRS. Form 1096 is a summary of all the 1099s you sent to your contractors.

You mail copy B to your contractor.

You keep copy C for your own records.

If you use programs like Quickbooks and TurboTax, Intuit offers an online service where you can fill out and print, or email, your 1099s to your contractors and freelancers, then submit them to the IRS, along with your 1096.

Are there other factors involved? Probably. This has been my experience in the past. The IRS updates forms and the rules to use them every year. Again, if you have questions, I recommend contacting an accountant. Not only will they be able to answer your questions, they can fill out and submit the 1099s for you.

What If I Didn’t Get a 1099 From One of My Clients?

An excellent question, and the very one I asked my accountant today. Here is his response:

“It’s the responsibility of the client paying you to obtain the information necessary (via Form W-9) to prepare and file a Form 1099 for certain payments made to you. You have no responsibility for making sure that a Form 1099 is issued to you and there is no potential penalty to you for not receiving one.

That said, the mere fact that you didn’t receive a Form 1099 for any income received does not relieve you of the responsibility of properly reporting and paying tax on that income. The same holds true for both domestic and foreign clients.”

– James Randall, Barneke and Anderson

To translate what Jim said into non-accountant:

If you’re supposed to send someone a 1099, you have to ask them to fill out a W-9 form. The W-9 gives you all the information you need to issue a 1099-MISC to them. You can find the W-9 form here.

If you’re supposed to get a 1099-MISC from someone, and they don’t send it, you’re not in trouble if you file your taxes without their 1099 form.

However, you do have to report, and pay taxes on, your income, whether you received a 1099 or not.

Did This Blog Post Help?

I know I’m not an expert on taxes. That’s part of the reason I wrote this post. I wanted to put an important part of being a small business owner into as simple a form as possible.

Another thing that should be as simple as possible is writing emails to your subscribers. Yet, like taxes, it’s one of those things many of us put off because it feels complicated and overwhelming.

I’m going to share a secret with you here. Your subscribers have a “Nurture Email Type” they’re most likely to open, read, and buy from.

Once you know your subscribers’ Nurture Email Type, it makes writing that weekly email a breeze. Much easier than doing your taxes! Plus, you’ll be creating a steady stream of new and returning customers, and making more sales.

Discover your subscribers’ Nurture Email Type by clicking on the button below to take my quiz.

DISCOVER YOUR SUBSCRIBERS’ NURTURE EMAIL TYPE NOW

How Well Do You Adapt to Change in Your Small Business?

March 8, 2018 by Tanya Brody Leave a Comment

The only true constant is change.

This is one thing I’ve learned over and over again in my life, and especially in my businesses.

Having some ability to adapt to change is necessary for every small business owner.

Maybe one of your suppliers runs out of, or stops making, a part you need for your product.

Maybe federal regulations change your ability to import a necessary ingredient.

Maybe the partner or spouse of a person who is critical to the functioning of your business gets an offer to work somewhere fantastic, but that offer requires them to move, taking your critical person with them. (And that “critical person” could be you.)

There are all sorts of situations that cause change in your small business. The real question is, how quickly can you adapt, so you can keep moving forward?

This is one of those weird situations that you can’t really “plan” for but you do need a “backup” in place when it occurs. However, you rarely know what that backup may be, because typically, you have no idea what change is coming your way.

Knowing This, How Do You Adapt to Change in Your Business?

For a business that creates a product of some sort, you either find a new supplier, or you learn to make that part yourself. Sometimes, you have to create that new supplier, by going to a company that already makes something similar and asking them to modify their process to make your part.

If an ingredient in a recipe becomes unavailable, you either find a new place to get that ingredient, or you find a new ingredient. Sometimes you have to go as far as changing your menu.

When you’re a freelancer, change usually involves a sudden increase or drop in your work. This is either because of an increase or decrease in the number of clients you have, or in the amount of work they’re sending you.

(By the way, the following is also true for businesses that produce products, just change clients to customers and work to sales.)

If you suddenly have more work than expected, you spend a lot more time working than you had intended. Sometimes this involves pushing back other clients’ projects, or your own work. Times like these are great in terms of income, but they can be frustrating with regards to your personal life.

The alternative is to find another freelancer you trust to do the work for you. Then you review the work before it goes back to your client to make sure it’s done to your standard. Sometimes this works, sometimes you end up redoing the entire project, and you have to pay someone else for work that isn’t up to snuff.

Again, if you have enough work (and therefore money) coming in, it’s usually worth it.

When you suddenly discover that you don’t have enough work coming in, you have to hope you’ve put the right systems in place to make up for that.

The first place you typically turn when you’re a freelancer is to your email list.

You do have an email list, right?

If not, you should.

Here’s a post on why you should have an email list, how to set one up, grow it, and what to write about.

Using Your Email List as Part of Your Adaptation Strategy

Why do I encourage you to use your email list first?

These people all know you (hopefully because you’ve been emailing them on a regular basis). More importantly, at some point they’ve all said “yes” to something you’ve offered them. They’ve opted into your email list and expressed interest in your product or service.

Everyone on your email list is what’s referred to as a “warm lead” in the sales world. They know your name (or your business’s name) and they have some inkling of what you do. They may have worked with you before or bought your products.

This is the best place to start when you need to increase your workload.

And you can do it with a simple email that looks something like this:

Hey Samantha,

Tanya Brody here, you contacted me a while back, asking about my availability for an upcoming project. Unfortunately, I had to turn you down at the time. But things have changed since then, so I’m writing to let you know some time has opened up in my schedule in the next couple of months.

If you’d like to discuss that project, or different one, please schedule an appointment with me by clicking on this link. It will take you to my Calendly page, where you can choose a time at your convenience.

I look forward to the opportunity to work with you in the near future.

Cheers,

Tanya

Obviously, if you’re a business making a product, you’d adapt this email to invite someone to try your product (or to buy another one, or an additional product).

If you’re a service-oriented business, you can offer a coupon for a discount on the price of the first service. If you’re courting customers who haven’t come in lately, you can do the same thing, but phrase the email so you’re offering them the discount for their next service.

What I’m trying to say here is, your email list is a very valuable asset, so make sure you use it when you need to increase your business.

Get the Word Out on Social Media

Social media is a great way to let the world know that you suddenly have time on your hands and you’re looking for clients. One quick post and you can reach hundreds of potential clients.

Ideally, you have a Facebook page, a LinkedIn profile, an Instagram account and a Twitter account for your business. (In the interest of full disclosure, I only have the Facebook page and the LinkedIn profile. I was going to make a business-only Twitter account, I just never got around to it. And I don’t do Instagram.)

If you don’t it’s still an effective way to spread the word via friends, family and those people you only know in the digital world.

Most people post about their daily lives. That includes changes in their work status. I’ve seen hundreds of people successfully land new jobs shortly after losing theirs. I’ve also seen freelancers fill up their schedules quickly by announcing they have time available.

When I started my freelance copywriting business, I wrote a post about how supportive my community was as I was starting. It all started with a “vaguebooking” post I put on Facebook and turned into an incredibly long and amazing post of people saying, “I’m so sorry to hear this” or “you can do this” or “hey, these folks are looking for a copywriter.” Check it out at the link above.

If you reach out to your social media community, you’re sure to get a positive response. You may not get work immediately, but word travels fast and you may have new clients knocking on your virtual door, saying “Hey, such and such person mentioned that you have time available to take on a new project…”

Again, for those of you with more traditional businesses, you can also announce your special, discount or other exciting news on social media to get customers in the door.

Update All the Online Profiles

This is a tactic particular to freelancers.

Because there are so many freelance job boards, bidding services and places to promote yourself as a freelancer, you need to go update your profiles. Yes, all of them. At least the profiles where you’ve gotten work in the recent past.

This is just another way of letting your clients know you’re available to take on more work.

For some of these services, you’ll just have to go in and change your status to available or post something saying you’re taking new clients. For others, you’ll need to look through the long lists of jobs available, make bids on those jobs and hope yours gets accepted.

These freelance websites are not my favorite way to get work, but they are effective when it comes to making sure the bills are paid.

Continue to Make Sure You Have the Ability to Adapt to Change

You will always encounter changes in your business. The more prepared you are to weather them, the better off you’ll be. And to be completely candid, if you can’t handle change, you may not want to run your own business.

That’s why you’re better off preparing for it whenever you can. When you can’t, make sure your business is agile and adaptable enough to survive whatever comes your way and thrive, once the crisis is past.

If you haven’t guessed yet, all of this is a very long-winded way of me announcing that I suddenly have time in my schedule. I am still working for FunnelDash, but my position has been reduced to part-time. I work for them on Tuesdays and Wednesdays now. The rest of my week is up for grabs.

I am looking for clients to fill in that gap.

If you have a copywriting project coming up in the next few months, please schedule an appointment with me by clicking on the button below.

I am also offering a new business development and marketing consultation service. We meet weekly or monthly and I walk you through the process of setting up and marketing your business. I’ve done this for a few people now and they’ve found it very helpful. More about this service in next week’s blog post. (You’re welcome to make an appointment to find out more about it in the meantime.)

For those of you on my email list, you’ll be getting an email similar to the one I wrote above.

For those of you who are friends with or follow me on social media, you’ll be seeing posts soon.

And yes, I’m going to go update all the online profiles.

As always, thanks for following along on this crazy journey of mine.

How Do You Handle Change in Your Business?

Tell me about it in the comments. I’m always interested in how business owners weather the ups and downs of their industries.

Happy Birthday to My Blog and My Freelance Copywriter Business

March 27, 2017 by Tanya Brody Leave a Comment

This month marks one full year since I started writing this blog.

I can’t claim I’ve been incredibly consistent, or that everything I’ve written has been perfect, but I’ve kept it up to the best of my ability, as I’m growing my own freelance copywriter business.

It’s been a little over a month since I wrote a status report on what I’m doing. My last one reported that I’d made my goal, without realizing it, months ago. Yay me! Thank you again, all of you, for your congratulations, whether they came in the comments on that blog post, on my Facebook page or Twitter feed, or in a private email. They mean the world to me.

Suffice it to say, things are picking up around here. One of my new clients, a company called FunnelDash, brought me out to the Traffic and Conversion Summit earlier this month. It was fantastic. I met lots of folks, learned more about FunnelDash’s product and had a wonderful time.

Meanwhile, I continue working on projects for other clients and am currently booked through mid-April, if not further out (which is great for me, but hard if you need something done quickly.)

I’m closer and closer to making my goal a regular occurrence, instead of a spike in activity, which makes me even happier. For those of you who are wondering if you can “make it” yourselves, the answer is yes. You can. It takes time and determination, but if I did it, you can do it!

For the record, I’m going to save personal blog posts until the end of the month from now on. They used to come out around the 13^th of each month, which is when I started this blog, March 13^th, 2016. I don’t want to do that anymore, so, from now on, you’ll have to wait until the end of the month to find out what’s going on in my world.

Ultimately, this blog is not about me. I enjoy reporting in on my progress, and I’ve gotten good feedback from many of you, telling me that I’m an inspiration to those of you who are starting your own businesses, or who have your own businesses and are struggling to make them work.

Really, this blog is about you. If it were up to me, I wouldn’t write a blog post every week. I’ve got a lot going on and sometimes, I feel like I don’t know what to write about. Or I feel like I’m shouting into an echo chamber, writing about the same things everyone else writes about, just from a different voice.

I write this blog for you. All of you. Whether you’re my friends and family who humor me as I walk down this crazy path, or you’re on your own, similarly crazy path and are trudging along with me. I do this for your benefit, not mine.

So, tell me what you want to know. Tell me where you’re having problems and how I can help. Tell me what experiences of mine you want to hear about. I am here to serve you, my fellow small business owners and folks who are kind enough to follow what I’m doing.

Stop behaving like a typical Minnesota audience, who give the polite golf clap and come up to you to tell you that they love what you’re doing, then walk away with a bemused look on their faces. (I grew up in Minnesota, I live here now, and I’ve been a touring musician and performer. I am licensed to say these things.)

Tell me what you like about my blog posts. Tell me what you hate. Tell me what you want to see more of, so I can give it to you. Really. I want your feedback. Either leave it in the comments below or fill out this survey.

I want to help you get to where I am now, and continue on to where I’m going. I want all of us to be successful in our own spheres. (I’m weird like that. I think everyone deserves to make it. Success isn’t a pie that diminishes the more others take. There’s plenty to go around.)

Yes, I’m always interested in helping you be successful by writing your advertising copy. And I’m aware that I can’t handle all of you as clients. I need to sleep occasionally. But I can help you with writing techniques, ideas and marketing advice.

Help me help you. What do you need? What will get you to that next step on your path to success?

I look forward to hearing from you in the comments, or on the survey.

Thanks, as always for following along on my crazy journey as I grow my freelance copywriter business.

My 3 Favorite Business Tools to Help with Productivity

January 24, 2017 by Tanya Brody Leave a Comment

One of the biggest hurdles to overcome when running your own business is finding the time to do all the stuff that it takes to run your business. The day-to-day work can be overwhelming.

Fortunately, there are a lot of companies that create business tools to make it easier for us small business owners to do what we love.

Here are three of the business tools I use every day.

Timely

Keeping track of how much time I spend on any given project has always been an issue for me. I’d vaguely observe what time it was when I started and vaguely estimate how much time I’d spent when I was done. Not terribly efficient.

Enter Timely.

I looked at, and tried, a few different time tracking apps before I settled on Timely as one of my regular business tools. I like it because it is sleek, easy to use and gives me exactly what I need to keep track of time spent on each project, but doesn’t pile on a bunch of extra stuff I’ll never use, or that I already have through other apps and programs.

Timely lets me track my working hours by project and client. I can bill different projects at different rates, if I need to. I can also set a certain amount of money or a specific amount of time for a project, and Timely will tell me when I’ve gone over that amount, and by how much.

Because I typically bill by the project, this helps me determine how much I ‘really’ made per hour when I go over my allotted time or budget. It’s good for helping me estimate future projects and noting if the number of hours for the project need to change.

I can also look at reports on what I’ve done. This helps me keep track of the project and what I need to do next. I can also export the report in Excel or as a PDF, to send to clients.

Timely integrates with several apps, including Google Calendar, Trello, GitHub, Asana and Office 365. Timely will automatically enter the time I spent on work appointments. This is great if I forget to start the timer once I’m on a call, or at a meeting.

Timely also has great customer support. Any time I have an issue or I’m confused by something, they’re always quick to respond with useful information or to help me fix the problem.

Timely offers a free plan, but it limits the number of projects you can have running at a given time. It also allows for multiple users, depending on the plan you choose.

Timely is keeping me on track, by tracking the amount of time I spend on each project. It’s fantastic. Learn more about Timely here.

Calendly

Setting appointments is one of my least favorite time-wasters. I hate sending emails back and forth with, “Can you meet at 2:30 on Thursday?” Only to hear back that Thursday won’t work, but how about next Monday.

To avoid all of this, I use Calendly. It’s a fantastic scheduling app that integrates with my Google Calendar. I just send someone a Calendly link for the appropriate type of appointment, they go to the app, choose a time we’re both available, and book the appointment.

We’re both sent a calendar invite, which goes right into my calendar, so I don’t forget. I can schedule reminder emails to go to the person who booked the appointment, so they don’t forget either. They can cancel the appointment from the reminder emails if something comes up, and Calendly prompts them to reschedule immediately.

On my end, I can send different appointment types of varying lengths, with buffer times on either end to make sure I don’t overlap appointments. I can control the times clients can schedule appointments, and I can block off certain days if I know I’ll be unavailable.

It’s a pretty slick system.

Calendly integrates with several apps and programs, including Drip, Salesforce and Zapier. They also have an API key and webhooks available for those who are more proficient at programming than I am.

Calendly does offer a free account, but your appointments will have Calendly branding on them. It’s not terribly intrusive. If you only have one event type (one type and length of appointment you need scheduled) it’s a great free scheduling solution.

If you have multiple event types, like I do, want to send appointment reminders and integrate with other apps, you’ll have to go with a paid account. The Premium account is $10 a month or $96 a year, per user.

Calendly has made my life a lot easier when it comes to scheduling appointments with clients and I recommend it highly. Learn more about Calendly here.

Quickbooks Online

I’ve used Quickbooks to handle my billing for years. Before that, (back in the dark ages) I used Excel spreadsheets. Not a fun game, I don’t recommend it unless you’re really good at Excel spreadsheets. I’m not.

Life in general has moved online. So has Quickbooks. It’s a fairly simple system to use, especially if you’ve used Quickbooks in the past.

I can create and email invoices to clients from the desktop interface. I enter a client’s contact information and Quickbooks sets up the email for me, then sends it when I’m ready. I can create recurring invoices and send them monthly to my retainer clients. They go out automatically, so I don’t have to think about them.

I have control over how the invoices look, including adding my logo, changing colors and specifying which columns and fields appear on the invoice. It’s very similar to designing an invoice in the desktop version of Quickbooks.

I can also accept payment via Quickbooks. I had to sign up for this service, and there are fees. It’s 50 cents per direct deposit and 3.5% of a credit card payment. But it’s worth it to have clients pay directly from their invoices.

All of my business bank account transactions are downloaded into Quickbooks, so I can manage everything in one place. The download interface is easy to use, though it took me a few times to get used to using it. Quickbooks automatically enters any payments made through its system into my checking register, as well as the fees it takes for letting me use that system.

Quickbooks offers a free 30-day trial. I pay about $16 a month for the version I use. There are several different versions, depending on the size of your business, number of users, etc.

Using Quickbooks online has made my billing and accounting much easier. Learn more about Quickbooks here.

What Productivity Business Tools Do You Recommend?

I hope this round-up of business tools to increase your productivity helps. I’ll keep doing these posts as I have more tools to pass along. Meanwhile, what business tools do you use? I’d love to hear about them. Perhaps I’ll end up adopting them myself, and mentioning them in one of my future posts.

6-in-6 Freelance Copywriter Report – 9 Months

December 15, 2016 by Tanya Brody Leave a Comment

Aaaahhh!!!! I can’t believe the end of the year is staring me in the face! How did it get to be December so quickly? This means it’s been 9 months since I started my freelance copywriter business, this blog and this challenge.

I can honestly say, it’s been a wild ride, and I wouldn’t trade a moment of it. I love working for myself. I enjoy the challenge of taking my marketing and writing skills, and applying them to a new project or new industry. I love learning new techniques and about new products.

In short, I am in information junkie heaven.

Some of you may remember that I was part of something called the CLIMB program. It’s part of the Minnesota unemployment system that allows people to collect unemployment while starting their new businesses. I wrote about it a few months back. You can read that post here.

Having that income is what allowed me to stay afloat for several months. There were months when that income was pretty much all I made. Those payments ran out last month.

I’m pleased to say that I have made up that income, and more, just with freelance copywriter clients. I’m still not where I want to be, making $6000 a month, net, but I inch closer every month.

I have several new clients in the works. A couple of small, one time projects and some ongoing. I’ll introduce you to them as they move forward.

I finished the launch for the Medical Moguls “Momentum in Medicine” event. You can see the website here. It was a lot of work and a lot of fun. I ended up learning a couple of new platforms for this project, so it was an adventure.

I am very happy to say that Inkit is ramping up for their product launch. We’re hoping to be ready to roll by February at the latest. If your business uses direct mail postcards for promotions, (or you’re thinking about it) you should check out Inkit’s website.

Inkit is a SaaS platform that lets you create a postcard mailing in their drag and drop builder, upload your mailing list. As soon as you hit the “Send” button, your mailing project goes directly to the front of the queue of one of Inkit’s printers and is in customers’ mailboxes within a few days.

Inkit is only collecting email addresses of folks who are interested in their platform right now. But once it’s up and running, it will save you a ton of time and money on your direct mail projects.

Enough about my fabulous clients. On to me…

Since the new year is coming up, my New Year’s resolution is to be better about writing regular blog posts. Right now, they kind of get chivvied in where I have time. Having clients is a wonderful thing, and I wouldn’t have a business without them. But I do have to attend to my freelance copywriter business as well.

So, starting next year, on January 3rd, I will strive to have a blog post out every Tuesday. Those of you who are on my email list will be notified as soon as it’s available. If you’re not on my list, you should be!

Join the club! Sign up via the cute little pop-up form in the lower right hand corner of this page. Or the pretty green button in the sidebar that says “Follow My Journey.”

To keep this resolution, I need your help. I want to know what you would like me to write about.

Are you interested in more copywriting tips?
Do you want to know more about starting and running your own business?
Do you need more information on how to do your own marketing?

Let me know by filling out this quick survey. It will only take a couple of minutes, and you’ll be doing me a huge favor. I’ll get more ideas for blog posts, and you’ll get the information you want.

As always, thank you for following along on my crazy journey to become a freelance copywriter. It’s a pleasure having you on this path with me.