Stay tuned! Check out our latest videos, television appearances and podcasts.
NASE Welcomes “Freelance Economy” Entrepreneurs to the Largest Small Business Demographic
FOR IMMEDIATE RELEASE :CONTACT: Kristofer Eisenla, LUNA+EISENLA media kristofer@lunaeisenlamedia.com 202-670-5747 (mobile)
ALERT: Updated Small Business Stats WASHINGTON, DC – Whether it’s the private car service Uber or Lyft, the online marketplace Etsy or an accommodation provider called AirBnb, these small and individual entrepreneurs operating in the shared services space are part of the growing small business community in what is being called, the “freelance economy”. The National Association for the Self-Employed (NASE) , the nation’s leading advocate and resource for the self-employed and micro-business community, welcomes these new entrepreneurs to the largest small business demographic while reminding them of their rights and responsibilities.
“The self-employed community welcomes these new entrepreneurs who are operating in the ‘freelance economy’ to join them in the largest segment of the small business community,” Katie Vlietstra, Vice President for Government Relations and Public Affairs for NASE. “As millions of these new entrepreneurs are learning, the opportunities and financial benefits are endless by simply stepping out and running their own business operation. But as tax time approaches, there are particular responsibilities these new freelancers operating in this space must adhere to when it comes to registering their business, filing their taxes and operating in the small business market.”
These sole entrepreneurs express qualities of not being an employee of any other entity, control their own destiny’s and decide themselves when, where, how long, how much, how often and for how much they work. The “freelance economy” includes a variety of new and growing entrepreneurs who operate as independent contractors, on-demand employees, small employers or a variety of shared services for car rides, shopping, and lodging. In this regard, anyone can operate his or her own small business by becoming an independent contractor with a larger, umbrella corporate business operation. But under these arrangements, there are specific business responsibilities such as wage and hour laws, tax obligations, liabilities for accidents, and pension and nondiscrimination rules. For instance, these entrepreneurs may receive paychecks without any federal and/or state government tax withholdings. Despite being self-employed, they may still be required to pay a host of taxes , including income, self-employment, Social Security, and potentially Medicare tax.
Vlietstra offers the following tips for these new entrepreneurs to consider when entering the “freelance economy” workforce: 1. Understand the “Freelance Economy”: know the implications and expectations of working in the freelance/shared economy
Tip: Talk to others in the industry about how it works, the pitfalls, the opportunities to assess if it’s right for you.
2. Inform Yourself of the Liabilities and Obligations: operating as an independent contractor or self-employed entrepreneur requires particular responsibilities, such as tax, legal, organization and insurance obligations
Tip: Engage with a good accountant and/or lawyer to ensure you are following all local, state and federal laws and organize yourself legally accurate.
3. Operate on a Reputable, Established Platform: as the shared economy grows, more and more platforms, from credible to faux, will begin to pop-up
Tip: Do your research on who the company is, and how they operate. Are they credible and established? How do they operate, engage and treat independent contractors working for them?
4. Know the Resources Available: as a new entrepreneur, there are a host of resources from the Small Business Administration (SBA) to the National Association for the Self-Employed (NASE) and online information at your local small business government regulator available for you to take advantage of
Tip: Use what’s out there to help navigate through the complexities of small business ownership.
5. Educate Yourself about Tax Obligations: as an independent contractor, you will be responsible for filing taxes, paying your share of quarterly tax payments, on time and regularly, from self-employment to social security to Medicare tax
Tip: Engage a good accountant and/or bookkeeper to ensure you are aware of what you owe, stay on track in payments, and know your financial responsibilities.
Source: pie graph based on 2012 U.S. Census statistics, created by NASE
The new entrepreneurs in the “freelance economy” join a growing small business community of nearly 27 million non-employer and micro-businesses* whom generate over a billion dollars annually, according to newly released 2012 U.S. Census statistics. This is an increase of 80,822 self-employed (55,165) and micro-businesses (25,657) over 2011. In fact, 2012 represents a peak year for the self-employed with an average growth rate of 2.86 percent over the last 10 years (more than any other small business demographic). Non-employers are single or sole proprietors without employees also known as the self-employed while micro-businesses are small employers with fewer than 10 employees.
* This number is based on IRS data and does not reflect the total of the number of self-employed and micro-businesses nationwide, including those in who consider themselves part of the freelance economy
Source: bar graph created by NASE with U.S. Census statistics
Keith Hall, President and CEO of NASE and National Tax Advisor, alerts new entrepreneurs, independent contractors, the self-employed and micro-businesses to be aware of new changes and updates to the tax code as they file their 2014 tax returns. For more information on completing your 2014 tax documents, visit NASE’s tax resource center or the IRS or theSmall Business Administration (SBA).
###
The National Association for the Self-Employed (NASE) is the nation's leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE Small Business Locator helps identify and connect our nation’s smallest businesses. In addition, NASE’s new health care portal helps small business owners navigate the nation’s health care marketplace. The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association's website at NASE.org .