Do You Need Employees or Freelancers?

Does Your Business Need Full-time Employees or Freelancers?

Just as children growing into adulthood experience growing pains, there are growing pains to owning a business. For a business, these pains are not so much physical as they are financial and managerial, but they may still bring you to tears at times!

Brainstorming a business

Brainstorming a business

Perhaps the most difficult time period for a growing small business, particularly an entrepreneurial effort, is when additional help is needed within the company. It can be frightening, even, trying to decide whether the brand can support additional workers and, if it can, for how long.

Before stepping into an employer status, consider whether you really need employees. Would a freelancer or team of contract workers do the job just as well without long-term obligation? Do you have enough consistent, ongoing work to support employees and their needs? Below is some guidance to help you decide whether you should employ full-time workers or if freelancers are the right fit for your growing company.



Freelancers and Contract Workers

Hiring employees can be very costly. You can’t just consider salary or hourly wage; you must also take into account benefits, legal needs, accounting and payroll. These needs often require another person who specializes in human resources to guide and protect the company from potential problems. For a small brand, a freelancer (also called a contract worker) may be the right answer.

How Freelancers are Compensated

Freelancers only charge you for work they have completed, according to an agreed-upon contract rate. There are no benefits, taxes or legal issues to consider, outside of ensuring that the relationship is a true freelancer-client arrangement. The individual or company being subcontracted is entirely responsible for their own health insurance, taxes and other benefits.

You may be able to pay your freelancer monthly, weekly, as billed or through other terms that fit your cash flow better than a designated payroll date for an employee. How a freelancer bills you is based upon how his or her compensation terms are structured in the contract and whether he or she works for a contracting firm or as an individual.



Per Project Compensation

With freelancers, you may be able to agree to terms of compensation “per project.” This means that they will only be paid upon completion of an entire goal or set of goals. A project can be completed in one day or it can be something that takes a month or longer.

Sometimes, when arranging per project pay, a freelancer-client contract will require a portion of the compensation paid up front and a final amount upon completion. There may also be intervals of payments, to sustain the freelancer in longer projects. These are terms that a good written agreement should clarify.

Hourly and Monthly Pay

When a freelancer is paid hourly or on a monthly retainer, those terms are also outlined clearly in a written agreement. The contract must also state when each pay interval should be executed, whether compensation is delivered weekly, bi-weekly, monthly or on a specific date.

Also, find out if your freelancer has payment terms or if the compensation is due on the day a bill or progress report is handed to you. It is better to ask all of these questions in advance – and ensure they are in writing – than to suffer surprises along the way.

Written agreements

Written agreements

Importance of Clear Agreements

Finally, it is important that you discuss hours of work delivery, completion dates, obligations for supplies and equipment, and other expectations of the project. Some freelancers provide their own equipment, tools and even workspace for their services.

According to the Internal Revenue Service, there are certain things that a freelancer cannot be required to do, without being provided status and benefits of an employee. Whatever the mutual expectations are, you should have the freelancer provide written commitment to those rules before starting work.

Examples of Freelancing

Some examples of freelancing include IT or web design projects, wherein technical experts or web designers may even be located in another state or region than your company. They will likely charge a flat fee for their services with an expected finished project or website delivered in a specified period of time. They may charge an additional change or consultation fee for work beyond that first deliverable.

Someone such as a day laborer may work entirely on your site according to the hours you need. While things get sticky in the area of on-site management or directives of freelancers (who are, essentially, their own bosses), a good contract ensures everyone knows what the other expects.

A No-Brainer

A No-Brainer

Almost Headache Free

Depending upon your precise needs and expectations from additional workers for your company, freelancers can be an excellent medium for accomplishing goals without the headaches of regular employee management.

The key is to ensure the project or goals are clearly agreed upon in writing, along with compensation and specifics of project delivery. Freelancers’ rates may be higher than employees, but once the project is completed, you are no longer obligated to supply work or compensate them again, although you will likely have a great resource to call upon when in another crunch.


If you experience a regular and consistent need for help within your company, hiring an employee is likely a better and more cost-effective option than continuing or starting use of freelancers. Through an employee, there are benefits not experienced with freelancers. Those benefits may fit your situation for the long term.

A Blueprint

A Blueprint

Scope of Work

If you need just a logo designed, hiring an employee would likely result in a later search to find things for that person to do, in order to offset his or her hourly expense. If you have ongoing IT development or marketing needs, for example, you will benefit more from someone who gets to know your company, develops loyalty to it, is personally invested in ongoing growth of your brand, and can be provided with enough daily work and accomplishment to justify a continuing salary. That person would be a regular employee, not a freelancer.

Clear Definition

Clear Definition

Develop a Job Description

Before searching for the right employee, help yourself better hone in on what needs to be accomplished within the role. Develop a solid job description that you can also provide to applicants to reflect what you are seeking from the new hire.

This will help people interested in the job determine if they are the right fit, and you will know precisely whose resume provides a match with your expectations. Good examples of job descriptions can be found on the web for every common job title within a given field.

Budget for the New Hire

Figure out what the local competitive rate is for the job description and position title you developed for the role. Ensure you can afford this ongoing, inflexible expense.

If you struggle with the competitive rate, rather than trying to take on an employee at a lower rate (which will undermine loyalty and quality of work), consider finding a highly qualified and enthusiastic person who can accomplish more for your company in part-time hours than a lower-rate person could in full-time hours.

Parents with school-aged children, college students, retirees and many others with incredible aptitude and skill-sets are available on a part-time basis and may be able to grow into full-time hours when you are ready for them.



Match Personalities

As a small company, you are likely working in small quarters or need to maintain a heightened enthusiasm against bigger odds than a manager of a larger business department or someone at the helm of a big corporation.

When interviewing for your new hire, be sure you feel a certain hopeful chemistry with the applicant. Will he or she have the right attitude to help you accomplish growth-oriented company goals? Will he or she be the type to roll up his or her sleeves and happily pitch in during a crisis? While you should rarely be friends outside of work with employees, as it undermines the management hierarchy, this should be a person you can trust for the long term.


Save on Your 2014 Taxes by Sharing the Wealth

Save on Taxes in 2014 by Sharing the Wealth with Family

Many older individuals are taking a closer look at their finances today and are wondering how they can achieve specific financial goals that they have. Some may be completing tax planning steps, and others may be planning their estate. You may not realize it, but there are tax rules in place that may make it affordable and even beneficial for you to combine your tax planning and estate planning efforts together.

Save on taxes by sharing the wealth

Save on taxes by sharing the wealth


Common End-of-Life Plans

Many individuals will leave behind financial assets when they pass away, and these assets may include cash, stocks, bonds, mutual funds and other similar types of assets. If you are planning your estate today, you may be wondering how you can divide your assets as well as how you can decrease the estate or death tax that your loved ones may be burdened with upon your passing. While you may wait until your passing to divide your assets, there may be benefits to both you and your loved ones by sharing the wealth today.

The Effects of Giving Financial Gifts Now

In many families, the older family members have achieved a level of financial security and even wealth that younger family members have not yet achieved. This generally means that younger family members may be struggling financial and may have a considerably lower tax bracket to boot. The financial gift that you provide to them could benefit them by giving them money when they need it most, and it could benefit you by decreasing your own tax liability.


Giving Financial Gifts

Giving Financial Gifts

The Tax Rules for Lower Income Brackets

You may worry that gifting funds now would create financial hardship on loved ones by increasing their tax liability, but this may not be true. Consider that the tax rate for individuals in the bottom two tax brackets for long-term capital gains and dividends is zero percent. This means that those who are married filing jointly with taxable income of $73,800 or single with income of $36,900 or less will not pay taxes on the gift you give them. You will essentially transfer the shares into their name now to eliminate your tax burden without creating a tax burden for them.

The Right Decision For You

Before you gift your own assets, you should ensure that you will not need them later in life. It can be difficult to estimate the length of your living years, and some individuals who believe their end is approaching may still live a decade or longer. The last thing you want to do is to run out of money and still have many years ahead of you, so you should consider the amount of your gift carefully.

Consider the Value of the Assets

It is important to choose the gifts that you give to loved ones carefully. When you give assets that have depreciated in value since purchasing them, you will be giving away a deduction that you may benefit from. In order to prevent this and to maximize deductions for your benefit, only select assets to gift to loved ones that have appreciated in value.

Value of the Assets

Value of the Assets


Reducing the Size of Your Estate

There are limitations regarding the amount of assets that you can gift to loved ones each year, and there are personal financial reasons why you may want to limit the amount of your gifts as well. Generally, you want to think about reducing the size of your estate so that the amount that is passed on to loved ones after your death is minimized. This can reduce the amount of estate taxes that they will be responsible for paying.

Making Strategic Gifts

As you can see, there is some strategy involved in gifting your current assets to your loved ones during your living years. Making strategic gifts that have increased in value is important, and you also want to ensure that you will not need the funds yourself over the remainder of your life. You may consider making smaller donations now and increasing the amount of your gifts to loved ones later as you advance in age.


Making Strategic Gifts

Making Strategic Gifts


When to Seek Financial Assistance

Because of the potential tax liabilities in question for both you and your loved ones who will be receiving the gifts and because of the long term effect that the gifts can have on your own financial situation, you may consider seeking financial assistance before you make your gift.

By working with an estate planner, a financial adviser or an accountant who is skilled in this area, you will be able to make more informed decisions about your finances. There are dates when gifts must be made by in order to be included on the current tax year, so there is no better time than now to begin working with one of these financial professionals to begin planning your estate.

If you are in a situation where you may have more assets than you currently need and you plan to pass your assets on to your loved ones upon your death, you may be thinking that your loved ones could actually benefit from using those funds today. There are numerous personal, financial and tax benefits that all parties may enjoy when you give a financial gift this tax year.

However, before you make the decision to do so, thoroughly consider your own financial situation as well as the financial situation of the loved ones who may receive your gift. By doing so, you may be able to make a thoughtful decision that benefits all involved.

On top of all this, when it comes to your tax filings for yourself or clients, consider e-filing this year.  When considering solutions to efile 1099 forms, I recommend using services like  They’re an industry leader, and whether you use them or not, their service can be an excellent benchmark to measure other providers quality.

They handle everything – they efile 1099 and W-2 forms for you, as well as print and deliver your forms to recipients.  This will save you tons of running around and stress involved with organizing forms and postage, including running around to drop off the mail.  Their video is shown above, if you want to learn more.

Why Do I Need To Use The HCFA CMS 1500 Form in My Office?

There are countless forms to fill out when working at a medical office.

I guarantee you, it gets confusing to medical office staff. The most used insurance payment documents are the hcfa 1500 claim forms. Here’s a brief history for you:

  • It was named after the Centers for medicare & medicaid svcs
  • Previously known as the HCFA 1500, it was re-named the CMS 1500
  • Generally, this form is needed to solicit payment from various Medicaid State Agencies

Widely used by providers and suppliers in the medical industry.

The rule is that you have to file the form with the payer in less than 365 days of providing your services.  Downloading or photocopying the form is not recommended, as it’s printed with a specific type of ink. For efficiency reasons, the payers typically use Optical Character Recognition tools to scan the data, and process payment requests.

Surgical procedures under insurance coverage have to use the CMS 1500 for payments.

Surgical procedures under insurance coverage have to use the CMS 1500 for payments.


Virtually 100% of the time, if the ink is poor quality, scanning errors occur.

Successful submissions only result if you use the exact document, with the correct case details. What’s most critical to successful form submissions are using the most recent forms, with the right ink. If you ignore these steps, delayed payments and rejections are almost inevitable.

Wait too long to re-send the right form, you may not get paid.

The bottom line is you need forms that are trustworthy. Therefore, you need a quality source for the new hfca cms 1500 form. This ensures your office runs smoothly, and your claims are paid.