I know summer is far from tax season but there are some things you should be thinking about now that will save you time come January/April.
If you blog on your own URL and get paid by companies for sponsored content you’re considered an independent contractor. Good for you! But the companies have extra paperwork to file at the end of the year if they paid you more than $600 during the previous tax year. The form they have to fill-out and send you is called a 1099-MISC. Businesses use the name, address and Social Security or tax identification number from form W-9 to complete form 1099-MISC.
Having a W-9 ready to go makes you super easy to work with and helps to propel you to the next level as a professional digital writer. The good news is that you can fill out the form once and save it as a PDF so it can be attached on the fly.
If you are worried about sending your SSN out to every random brand or PR company you may secure work from over the course of a year you can create an EIN (Employer Identification Number) as a sole-proprietor*. An EIN is a nine-digit number assigned by the IRS. It is used to identify the tax accounts of employers and certain others who have no employees. You can apply for one online but be sure to print the pages at the end, and maybe screenshot it too for good measure because you cannot go back and see it again.
As a sole-proprietor you’ll combine all the income you earned under your SSN and your EIN for your accountant (slash TurboTax come tax time).
*You can also file for an LLC with the state of IL which costs over $600 – advice I received early on was that an LLC wasn’t necessary until I could pay myself a reasonable, market comparable salary for the work I was doing and still have profit left over – as a writer this means a salary of around $40k plus profit.