If you're thinking about becoming a freelancer you probably fall into one of two categories: you're sick of the daily grind and your 9-5 and are looking for a more flexible lifestyle, or you want to score some extra cash on the side. Regardless of why you're interested in freelancing, there are some things to keep in mind to ensure success for your fledgling business.

You're a now a small business owner

That's right – if you're getting paid in exchange for a service or product, you need to pay taxes on your earnings. You can register your business on the IRS website, where you'll also apply for your EIN (employee identification number – sort of like a social security number for companies). Most freelancers choose to register a sole-proprietorship, as it's the simplest form of business. It doesn't create a legal entity, but once created, you are responsible for its debts. You can either choose a fictitious name (trade name) or register it under your own name.

Once you've registered your business with the federal government, you also need to check into local licenses. Depending on your location, you may need one to operate just like a brick and mortar business would.

It's all up to you, baby

Sorry – you're not exempt from taxes

As a self-employed individual, you'll owe taxes on the gross revenue you earn. In addition to filing an end of year tax return, you'll also pay quarterly payments on your revenue. This tax is the same thing your full-time employer would normally withhold from your paycheck: income tax, Social Security, and Medicare. If you're just starting out, make your best guess as to how much you'll earn your first year to determine your payments. If you're too high or too low, you'll either owe money or get a refund at the end of the year. Come tax time you'll file either a Schedule C or Schedule C-EZ (for many businesses with under $5,000 of expenses).

Protect your health

If you're a full-time freelancer, you'll no longer have the option of getting health insurance through your employer. Never fear – there are plenty of individual health insurance options available to you. You can either do some research on your own, and buy directly from a large health insurance company like Cigna, United Health, and Anthem, or check out the plans on the Health Insurance Marketplace. If you're under 26, you can stay on your parent's plan.

Just take note of whether you prefer a high deductible plan (which costs less per month but for which you'll pay more out of pocket) or a more comprehensive plan (which covers more medical procedures and visits, but has a higher monthly cost). Choose whatever makes sense for your health and well-being. But make sure you do have health insurance: even young people in good health can have a health crisis that could easily set them back several thousand dollars without insurance coverage.

Every tabletop with internet access is now your desk

Go with the flow

Part of the reason freelancing is so appealing is because of the flexible hours. You're the boss, so you decide when you work. That means unlimited vacation time and are the freedom to work around your other obligations, like family. Many jobs don't offer part-time options, and for those craving flexibility, freelance work is ideal.

However, the flip side to the flexibility is that cash flow is often irregular. Some months you'll be overwhelmed with work, others you'll have a bit more free time than you anticipated, or wanted. If you can cobble together long-term contracts with your customers, you'll be assured a more regular income, but for the most part it's catch as catch can. This type of lifestyle can be enlivening to some, and anathema to others. It depends on your appetite for stability and risk.

You're the boss…in every aspect

Relying on freelance income means the buck stops with you. You've got clients who depend on you to meet deadlines and to deliver exceptional results. Working for yourself can be incredibly invigorating—there's nothing worse than working for a faceless company for a boss who really couldn't care less about you—but you should know yourself and how you operate before taking the leap.

For example, you have to be vigilant about managing your time. Some people don't need a boss hovering over their shoulder, asking about their progress. They can focus when they need to and deliver the goods on time. Others find it more difficult to work when there's no external motivation. They need that outside encouragement (read: casual inquiries about how the project is coming) to stay motivated. If your personality type leans toward the latter, it doesn't mean you won't be a successful freelancer. But just keep in mind it does take a certain amount of discipline.

Yes, I'm the CEO

Marketing yourself

So you've got a talent that other people will pay money for. Well done, you! Now all you need to do is find customers—easier said than done.

You can start by tapping your personal network: friends, family, acquaintances, old work colleagues, etc. Let them know about your new business and ask if they know anyone who might be interested in your services.

Make sure your digital presence is credible and professional. Keep your LinkedIn profile up to date, and either hire a web designer or use a pre-fab site like Wordpress or Wix to create a personalized website where you can send people interested in learning more. Also make sure you're active on social media (everything from Twitter to Medium to Digg, etc.) because you're building your brand. If people don't get to meet you in person, they'll get a sense of who you are from your online presence.

There are hundreds of sites for freelancers looking for work. Depending on your service, you can apply to be part of Toptal (for experts in their field), or set up a profile on 99designs (for designers), Contently or Freelance Writing Gigs (for writers), or a whole host of others. This is when having a website also comes in handy, as you can use it to showcase your body of work.

No more 9-5! You choose your own work/life balance

Being a freelancer isn't for everyone. Try getting some freelance gigs on the side to supplement your regular income to get an idea of what it's like. If you find yourself itching to work on those projects and excited to get more of them, perhaps a freelance work life is truly your calling. And you have to admit: being your own boss is pretty awesome.

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