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Very amicable. If only we could say the same for Jason. Shame.

 

Why has no-one disputed the fact that 'efforts' is a word IN THIS CONTEXT. There is very little point in bypassing fundamental issues, or making statements as if they are factual when this is not the case. I feel sorry for bestwriter - he's simply canvassing for work and Jason's cowardly attempt to hit out from behind a smokescreen of female support at a fellow professional is simply disgusting. Give the guy a chance - if you're the best in the business as you so frequently tell us, he surely won't be a threat?

Another thing that I'd like to add - since when did Jason become the fountain of knowledge and experience? I know copywriter's that have been around for decades, worked with top marketing agencies and have a portfolio that would impress anyone - to say Jason is the best in the business is a bit rich. To say Jason is the best of a bad lot might not be too far from the truth.

I think I'm going to start telling people I'm the best lover in the world - I'm sure if I say it often enough, I too can garner the same level of support as Jason has.

Good idea Denise - if you can't handle the heat, take a leaf out of the wonderful Jason's book and get out of the kitchen.

 

The nice thing about having a business-oriented degree is that I did have to study accounting (and I studied it prior to college, and continued to educate myself in the area afterwards when I became a business owner). The problem is that you're not differentiating between "freelancing" and "running a business," which are two completely different animals.

Wage is an expense if you run, let's say, a corporation, where you essentially treat yourself as a separate entity from the company itself. Your wages become an expense for the company. In my PR firm, that might be true (just as an example... technically it's not, because of the legal business form I choose to operate under for tax purposes). In my freelance writing work, it wouldn't be true any way you cut it, unless I chose to outsource my work, which I very rarely do, and which no one here said anything about. We're not interested in having others do our work. We're interested in showing new writers what they can do with their writing in the course of a year.

As a freelancer, it's a different game than operating as a business owner. Your "wage" is the equivalent of your profits, and it's not an expense. You can plan out an expected "salary" when setting your billable rates to help you crunch the numbers. Other than that, as a freelancer, all that matters is what goes into your pocket... not trying to have 100k sitting in the bank at the end of the year. We're basing it on a livable income, in no different of a way than if I were offered a 100k job from an employer... the salary in that case is still 100k, no matter how much you spend on work clothes, getting to and from work, health benefit contributions, etc.

We're working towards a reasonable equivalent, and you're free to not like what we're doing. Plenty of others do. If you don't like the way income and wages are handled in the freelancing world, take it up with the IRS. They set the rules... not me (and they don't include income being divided between "wages" and "profits" for freelancers - all the same thing).

 

I don't know too much about accounting conventions across the pond, but from my perspective, there seems to be a few flaws. Of course, please flag me up if I'm wrong - my PhD is in Law, not Business.

Surely income doesn't get divided into wages and profits, because profits aren't income? Also, say for example you had a contract worth $1,000. That isn't a profit of $1,000 - if you choose from that $1,000 to draw a wage of $1,000, then profit for the project will be $0, but your expenses will be $1,000, i.e. $1,000 in wages. Similarly you could choose not to draw $1,000 and leave the rest as reserve in order to fund future investment in your enterprise, even if it is just you 'flying solo'.

As a sole trader, you're still running a business - you could choose to invest $500 from your project in designing a website for example - this is an expense, and will be tax deductable at the end of the year. It is not you spending from your wages, which otherwise wouldn't be tax deductable, unless you could link it to business purposes. Assuming you only have this one project in the accounting period, this would be entered (year end) as sales of $1,000 less expenses of the website ($500) and your wages (the remaining $500) to leave a profit of $0.

I hope I explained that OK - please either of you take the time to correct me if I'm wrong.

 

If you choose to reinvest, that amount is then an expense. But your total profit when all is said and done is what your income is, at least in the US... I won't speak for rules in other countries. Your net income and profit are not two separate things. Also, you're not technically running a business in the US as a sole trader unless you choose to set up a sole proprietorship, and not work as a freelancer. While similar in many ways for tax purposes, again... not the same thing. You don't deduct wages the same way you would at the end of the year for taxes. The profits of your freelance work are all income, and you pay income tax on all of it. There's no differentiation, like leaving money to sit in a business bank account. There's no business. It's just you as a freelancer, and everything is accounted for on a personal level, not a business model. If you ran a business, such as a corporation, and paid yourself a wage, but the corporation was a distinct entity of its own, it would be entirely different. The business could have a profit on top of any wages paid out to you.

 

I assumed you owned a business entity. Are you therefore saying that income = same as profit, or income = same as revenue for you?