Yesterday I received an email from Catalyst Game Labs' controller (Publishers of BattleTech, which I do freelance writing and game development for). She was just dropping me a line to tell me a check for one of my published projects was in the mail.
After the obligatory happy dance it did get me thinking about the whole making money part, of what can still only be fairly called a hobby.
Hobby… Yes, it is still certainly a hobby. I made a respectable amount of money last year, but in the grand scheme of my monthly expenses and day job paycheck it isn't enough to alter my basic lifestyle. Last year I used the money mostly to pay off bills and cover unexpected expenses of the tight economy. So I'm not getting rich off this, but I am getting paid. And with paychecks come certain things you don't tend to think about.
So knowing I'm getting another check in the mail, also made me flash back to my recent, yearly, brush with Uncle Sam and my taxes. When you are making money in a few hundred here and a hundred there (I've had checks as small as $20) the total impact of what you make doesn't really sink in. So when I got my 1099 from Catalyst this year I had the sudden realization that this was going to make an impact on the taxes I might owe the government. Fortunately I'm married to a pretty awesome woman, who has run her own small business for years. She had raised this issue before and I'd pretty much brushed it off not thinking it would be that big an impact. She then went and saved my bacon by making sure we covered our anticipated taxes. At the end of our tax process we didn't owe Uncle Sam any money, but I darn well owed her flowers, dinner and years more adoration.
50%- When you get a check, divide it by 50%. No matter what it is, just divide it by 50%. Take half that money and send it straight to the IRS, do not pass go, do not collect $200. You can find the form and information for this at this link on the IRS website.
"Why 50%? I'm in the 30% tax bracket." - A couple of reasons. First off any of the money you over paid you'll get back in your tax return. Instead of risking having to pay more, set yourself up to get back. Also, prepaying state taxes is much harder and may not even be an option in some states. The extra money you sent to the IRS you can use to pay your State taxes. (I don't have a clue on how taxes work in other countries, but this would probably be a safe bet in most places.)
You are your own book keeper and your own lawyer:
You may not be making a lot of money, but you are making money and you are "in business." If you are getting paid, you should have some kind of contract or purchase order.
Track your projects: It's up to you to make sure you track this. If you don't have good records, then you are relying on the other party to have good records. This isn't always the case. I had a couple of old Catalyst projects that were delayed several times before seeing publication. The projects were so old, they were on the companies previous system, which had issues. Because I had a copy of my contract, I was able to send it to their controller and she was able to use that to pay me.
Read the fine print: It is a legal document. Read the whole thing and understand it. For example, a standard clause in the contracts I have is X% if I'm late. So if my work is late, then Catalyst can dock my pay. If you don't read it, and you sign it then you are stuck with it.
Say Thank you:
When they pay you, take the time to send a thank you email (or if you have regular phone conversations, pick up the phone). Yeah you earned that money, but in an industry like writing politeness goes a long way.
The flip side of this is to not be pushy or demanding. Even if the company you are writing for is late, not responsive or dropping the ball, politeness still goes a hell of a long way. It's a small industry and not to be to cliché, cream does rise to the top. Stay professional through any interactions and you'll be in a much better position in the future. I know I'm not Catalyst's best freelancer, but I also know that my politeness and professionalism has been one of the reasons I keep getting assignments.
Have some fun: Last year the economy really sucked for me. It was a belt tightening year all around and I had a lot of bills to pay. But despite all that I made a point to set aside a small part of each check I got for something fun (For me this usually meant a Sushi dinner for the family). You are working hard to get that paycheck and if all you ever do is pay bills, you don't get as much joy from the experience of being paid.
Until next time,
Writer, Explorer, Learner
Caveat Emptor- These blogs are written without the protection of an editor. I do proofread them, but I know I'm far from perfect. The ideas are sound and I'm still learning the foundational techniques. Thank you.