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What percent is set aside for federal?
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Incorporate. S Corp. Hire a CPA. Painless
Yep ☝️. Form an LLC. Talk to an accountant. They’ll tell you everything you need to do. Look into some accounting software to track your invoicing. There are some free options out there for small businesses.
Befriend Excel or Numbers.
Keep track of everything! I mean literally everything, everything including how many miles you drove that day, etc.
Keep track of all income and dates.
Take scans of every paycheck.
Expenses, keep ALL receipts. Keep track of those. Write them down ASAP, it’s easy to forget that you bought a client a coffee, etc.
Get a new bank account.
Get a new business credit card, helps keep things separated and not messy.
Talk to an accountant.
Put aside 30-35% for taxes and filing fees. And social security money.
And see about health insurance, you’ll need to pay your own.
Good luck!
You don’t necessarily have to form an LLC. Just pay 30% every quarter, so you don’t owe squat at the end of the year. Familiarize yourself with everything you can write off as a business expense. Definitely get a CPA.
Oh and quarterly taxes. You should/have to do those.
If you get paid in w-2s you don't have to do anything crazy. But if they 1099 you, be prepared to set roughly 30% aside for quarterly payments or outright payment.
More likely you'll get put on their payroll as a W2. If that is the case taxes work the same as it did when you were full-timer.
You'll miss out on the fun deductions like mileage, work attire, equipments, etc. but less of a hassle.
Good luck! I'm also new to freelancing and about to start my perma-lance gig soon!