EIN vs. Social Security Number

Thank you for the information on how to obtain an EIN. I’ve done
income taxes for years and have always placed my S.S. # at the bottom
of the form, with my signature, name and address. This year I decided
I was doing taxes for too many “unknowns” and using my S.S. #
bothered me. I decided to get an EIN for next tax season–when lo and
behold, here comes your article. I went online, filled out the form
and in less than two minutes, I now have an EIN number!

Thanks!

Donna

Whose Fault is It That I Didn’t Get Paid?

Dear Angela,

I have a comment about this week’s Ask The Expert: Whose Fault is It That I Didn’t Get Paid? Newspapers are different when it comes to rights than magazines. There are no first publication rights. As long as that writer submits her articles to other newspapers outside the original paper’s circulation area (the general rule is at least 100 miles away) she can send them to as many newspapers as she wants. This is the way writers make money writing for newspapers, which notoriously pay very low rates.

The exceptions to this rule are newspapers that are considered national: The New York Times, The Washington Post, USA Today, and Christian Science Monitor. Also, some larger newspapers do have contracts that place limits on where the writer can sell the article to others. Generally, though, most newspapers do not have contracts and the writer is free to send an article to as many places as she wishes.

However, she would not be able to send the articles to a magazine for first publication rights. She would need to let them know it was a reprint and where it first ran.

I enjoy reading your newsletter each week. Let me know if you have any questions.

Best Regards,

Linda A. Odum
Freelance Journalist

Simple Formula for Determining Writing Fees

A recent letter in your newsletter suggested that writers set their fees based on a formula that involved looking up the average salaries of writers, reporters and editors in your area on salary.com, and dividing by 52 weeks and then 40 hours to get your hourly fees.

Any freelance writer who sets fees based on this formula is seriously underpaying him/herself and undercutting freelancers who are trying to make a living.

Salaried employees generally receive benefits from their employers, including insurance (at least unemployment and worker’s compensation, and sometimes health insurance), paid sick leave, paid vacation days, and perhaps pensions or contributions to 401K retirement plans. The freelancer has to cover all those expenses. This can add up to as much as 40% of the actual salary.

In addition, as a freelancer/self-employed person you pay double what an employee pays in social security tax. That’s another 6.2% that comes out of your pocket instead of your employer’s. You may also be required to pay local and state business taxes.

In my experience, a freelancer should charge a MINIMUM of twice what a salaried employee would make doing the same work. If salaried writers are making $25 an hour, you should be charging at least $50.

Of course, you need to remain competitive with other freelancers, so it makes much more sense to find out what other contractors in your area are charging than to base your fees on those of employees.

Debra Littlejohn Shinder, MCSE, MVP