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daveglanz

Laid off

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After 2.5 years, I was let go from my senior designer/animator position last week. My former company seems to be facing some tough times. I'm freelancing here in DC, now, and thought I'd just get everyones' thoughts and suggestions about surviving out here :)

 

I just got married, so luckily, we're not hurting too much. But it'd be nice to figure out how to turn this into a positive thing.

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After 2.5 years, I was let go from my senior designer/animator position last week. My former company seems to be facing some tough times. I'm freelancing here in DC, now, and thought I'd just get everyones' thoughts and suggestions about surviving out here :)

 

I just got married, so luckily, we're not hurting too much. But it'd be nice to figure out how to turn this into a positive thing.

 

Hey Dave

 

Sorry to hear that you got laid off! I've been a fan of your work for a while and have meant to reach out and say "what's up". I freelance right down the road in Richmond. I actually used to work for the same company as Adam (he worked in the D.C. office and I worked in Richmond) and I kinda know Bob from his Henninger Richmond days. We should talk. I get overbooked sometimes and it's always great to have some rock solid talent to bail me out! I'll message you my email address. Hit me up if you wanna chat!

 

Good luck!

Dave

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Sucks to hear man. I know you may be feeling low right now but if it makes you feel better, I jumped into the world of freelancing without any connections, scared out of my mind, only 2 months ago - and so far, I think its the best career move I have made. I don't know too much about the D.C. market, or your ability to relocate - but there does seem to be a lot of gigs all over for qualified people, which you certainly are.

 

Don't be blue, enjoy your pension time, and happy hunting.

Edited by AromaKat

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First of all - thanks to all of you out there who've been emailing me. Much appreciated. Second - it's good to hear that freelancing is working out for so many of you. I was wondering if anyone had any opinions on becoming an LLC vs. a Sole Proprietorship. How do you guys handle taxes, invoices, etc?

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eh, LLC's are a fad. there really isn't any tax benefit to forming one. but should you get sued or should your LLC get sued you're not liable to pay out anything from your personal funds. What you really want to look into is an S-corp. With an S-corp you will get a tax benefit and you still have the same limited liability you would get with an LLC. So says my accountant anyway.

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If you're going to be freelancing for other shops, sole proprietor should be fine. If you're going to have your own clients, a legal structure may not be a bad idea. (I'm way overdue to set up an LLC, but it's on my "to-do" list).

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That's a major bummer, Dave. Like AromaKat, I'm taking the freelance plunge voluntarily after 3.5 years at a full-time gig (I'm a video editor), but whether it's voluntary or thrust-upon, it's nerve-racking. I can also relate to just getting married, and that certainly adds a layer of complication. If it means anything, I've seen your reel and you'll be fine. It's just a new mindset to put yourself in.

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Don't worry man. I got fired from my full time gig 'bout 8 years ago and i've been freelancing since. Best thing to happen to me. I've met plenty of people, made alot of new friends and learned alot of new things.

And like you, I had just gotten married. You'll do fine. You got a good reel. You gettin fired is already the start of something good!

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eh, LLC's are a fad. there really isn't any tax benefit to forming one. but should you get sued or should your LLC get sued you're not liable to pay out anything from your personal funds. What you really want to look into is an S-corp. With an S-corp you will get a tax benefit and you still have the same limited liability you would get with an LLC. So says my accountant anyway.

 

I have an S corp, and really, it doesn't quite do much for taxes unless there are multiple levels of people involved (I am starting the process of dissolving is, since all it does at the end of the year is make things more expensive In Re: accounting & legal) There isn't anything you can do with an S corp that can't be done with multiple LLC's/Sch.C businesses when it comes to taxes. Unless you are involved with a group, S Corp is a waste of time.

 

LLC's are all about distinguishing your assets from an occupations. Usually people use the same form to file at the end of the year (schedule C, small business), but it can make a difference if things go seriously, seriously wrong.

 

Back in the day I was a certified tax preparer and paralegal, and we ran into several cases where having an LLC was the luckiest thing to ever happen to a person. It costs barely a thing, is negligible in affecting the tax prep process come that time of year, and is cheap to set up to begin with.

 

No articles of incorporation, no attorney wrestling, no nothing. Git one.

Edited by misanthrope.

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I have an S corp, and really, it doesn't quite do much for taxes unless there are multiple levels of people involved (I am starting the process of dissolving is, since all it does at the end of the year is make things more expensive In Re: accounting & legal) There isn't anything you can do with an S corp that can't be done with multiple LLC's/Sch.C businesses when it comes to taxes. Unless you are involved with a group, S Corp is a waste of time.

 

LLC's are all about distinguishing your assets from an occupations. Usually people use the same form to file at the end of the year (schedule C, small business), but it can make a difference if things go seriously, seriously wrong.

 

Back in the day I was a certified tax preparer and paralegal, and we ran into several cases where having an LLC was the luckiest thing to ever happen to a person. It costs barely a thing, is negligible in affecting the tax prep process come that time of year, and is cheap to set up to begin with.

 

No articles of incorporation, no attorney wrestling, no nothing. Git one.

 

Sorry for hijacking this thread for a sec, but can you elaborate on the tax differences between the two? My tax guy told me that I should change to an S-Corp because I am currently paying around 15% in self-employment tax on top of the 22.5% corporate tax with an LLC. He said the self employment portion doesn't apply to S-Corps, but I keep thinking there is no way I could get away with only the 22.5%.

 

 

I was wondering if anyone had any opinions on becoming an LLC vs. a Sole Proprietorship. How do you guys handle taxes, invoices, etc?

 

As has already been said, its really, really easy to start. Just file through your local channels, or file with legalzoom. Legalzoom charges about 3x what you would pay if you went local though. Still, not bad if you want to make sure every appropriate step was taken and you hadn't overlooked anything.

 

Once you get the papers, go to the bank and open a business checking and a high-yield business savings account to store your taxes in. Then purchase quickbooks pro (only $100 for digital download on Amazon). I tried using Freshbooks for a while there, but it doesn't really organize things in a way that leaves me feeling comfortable. From quickbooks, I create a job, list all of the expenses and mileage related to that job, then create the final invoice / submit it as a PDF. The software breaks down what your actual profit was, from which you take ~30% for taxes and place it in that savings account for when its tax time. Ideally, after writing off more general things, like amount of space in your home you use as an office, car stuff, phone, etc, you get are left with a nice chunk of that savings after paying your taxes. Then, of course, transfer whatever you feel you owe yourself from business checking to personal checking / personal savings.

I think good separation between business and personal is in the financials. Definitely only use your personal debit / credit card for non-business things, and visa-versa. If you use paypal a lot, decide whether its for business or personal now. (Currently causing some organizational issues for me).

At least thats what I do, and like I said - I'm new to it (on a full time basis anyway) as well.

Edited by AromaKat

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Misanthrope - thanks for the perspective. What's your perspective on becoming an LLC filing as an S-Corp? How'd you transition from tax preparer to motion graphics designer?

 

Aromakat - good advice on opening a business account. I actually opened up an Orange savings account with ING for taxes last year.

 

I downloaded the demo of this: http://www.marketcircle.com/billings/. Anyone else here use it?

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Misanthrope - thanks for the perspective. What's your perspective on becoming an LLC filing as an S-Corp? How'd you transition from tax preparer to motion graphics designer?

 

Aromakat - good advice on opening a business account. I actually opened up an Orange savings account with ING for taxes last year.

 

I downloaded the demo of this: http://www.marketcircle.com/billings/. Anyone else here use it?

 

Every year, around tax time, I freak out and think I want to do an LLC.

Then my accountant talks me out of it.

However, because so many companies only want to deal with vendors and not employees, I did a DBA and got a tax ID number.

I think having a corporation or LLC is good if you have maybe a significant other you trust and want to pay, insure, use zip car with, etc.

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Definitely hire a professional for the tax side/business plan. Get consulted after you work a bit and figure out what your business model is going to be. Certain states have different statutes and fees and depending on how much work you end up doing on-site at firms vs. home office vs. remote things & that will change a lot, too.

 

There's been a lot of threads of freelance vs. staff. In my opinion everyone carves out a slightly different piece of their industry niche, the trick is figuring out what that is depending on skills, geography, network, etc.

 

Good luck Dave

 

c

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I'm in touch with an accountant through my father-in-law. They're recommending starting as simply a sole proprietorship, and moving up to LLC when deemed necessary. From what I understand - an LLC protects you from a worst case scenario, right? What are some of those scenarios?

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Yeah, I was laid off 3 months ago and it's been the best 3 months of my career. You've got a lot to look forward to!

 

I use Billings also, but Billings tends to be better at estimates/invoices than it is as a bookkeeping software. For that I use Outright.com which I can't recommend highly enough. It's free and it's freaking AWESOME! It's catered to freelancers which I think is a huge advantage over something like Quickbooks.

 

I'm doing the Sole Proprietor thing for now- though LLC is always in the back of my mind.

 

Best of luck, you're in a great position!

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Sorry to hear you got laid off. Probably end up be the best thing that could of happened to you career wise. I have an S-Corp now and it is a benefit that can save you money. I do think it is smart to have a year or two under your belt as a sole proprietor first to get a ball park of what your income will be. Unless you have a robust stream of income an s-corp can be too much of a burden to be worth it. Also my accountant gave me a heads up that some of the saving we are seeing as s-corps or LLCs (Which can file as s-corp) will be changing in 2011. My guy told me C-Corp might be the way to go in 2011 and beyond... :blink:

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So just a quick update about my situation:

 

I've been freelancing for a couple weeks at another studio here in DC, and will be here until the 27th. I have a contract offer for 12 weeks with another place walking distance from my apartment, plus the possibility of doing some ESPN work. So far, contacts have been easy to find. I haven't started an LLC yet - I'm waiting to see how things go over the next few months before taking that step.

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Happened to me also. Just got married and then laid-off. I had been looking for a while and had a job lined up. My new gig is amazing! Sometimes things happen for the best. It is different in the creative field. It not like you live in Detroit and the whole Auto Industry died. Good luck out there!

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DC is an untapped resource. Thank god for political media.

 

Dave

 

Are you still looking for work? I was in your shoes practically every job I've worked. I was at Discovery and yeah the Ax came. After that I was over at BrainBox and they went bust. It seems the first to go are always the creatives. Currently, I am on a 5 year contract working for the DoD. Its not the most awesome job, but it is consistant. If you get sick of the freelance gig and want to have something more stable. Let me know.

 

Matt

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Currently, I am on a 5 year contract working for the DoD.

 

What type of work does the DoD have for mographers? 5 years is a hell of a stint.

Edited by AromaKat

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