You're a freelancer. You've got a great eye for design and even all of the latest gadgets and software. You know the ins and outs of all of the programs and do your best to stay current with the latest trends. But did you know there's even more to it than the design aspect? Sadly, there are many economic bases that are left uncovered in the quest to run your own freelance business. This is partially due to the fact that no one shares this vital information with you and you're left 'paying your dues' finding it all out on your own---usually when it's too late to prevent a budgeting calamity! We've done our best here to share what financial knowledge we've come across while running our own design business and doing our best to fend off the greedy hand of Uncle Sam. Freelancers must unite against a common enemy: the IRS.

If you haven't already done so, open a checking account for your business. Many people who are self-employed simply use their personal bank accounts and credit cards to deposit income and pay for their business expenses. This is a big mistake. It makes it ten times harder to itemize your transactions at the end of the year. Also, it's vital that you deposit your income into your business account for taxes. If that account is empty at the end of the year, you may be closer to filing for bankruptcy than you ever wished to be. If your business is not registered with the state you will still be able to open an account as a DBA using your social security number. It's also important to consider opening an account at a locally based bank. The reason for this is to support your local economy as well as 'cast a vote' against the big banking behemoths. The Move Your Money campaign can tell you more.

The next step is to open a credit card that will only be used for your business expenses. Or better yet, a debit card (so you won't overspend) that is linked to your business bank account. This will save so much time at the end of the year when itemizing your taxes. It will eliminate the excruciating pain of determining which payments and purchases were for personal or business.

Step three: record everything! Develop two spreadsheets, one for income and one for all of your business expenses. If you work from home, a portion of your living expenses (rent/mortgage, utilities etc) are deductible as well as the obvious items like computers and printers but only if they're primarily used for business purposes. Bookkeeping is another one of those skills that your degree failed to teach you but will be vital in your career. Do your best to develop your organizational skills now and your budget will respond kindly.

Did you know that here in the U.S., self-employment tax is a whopping 15.3%? 12.4% goes towards social security and 2.9% for Medicare. This means that not only do you need to be saving a colossal sum of your income, you need to be aware of and making estimated quarterly 'pay-as-you-go' payments to the IRS. This will stave off a monstrous pay-in on April 15 as well as make sure you avoid inevitable penalties for not paying quarterly.

Got any additional tips? Share them with other freelancers to help unite!