Ask HN: Where to Invest Freelance Earnings?
I've just been paid by my first client (yay!).
My issue is, I'm still living on student grants and I'm not allowed to earn over a very small threshold, otherwise my student grants would be revoked (retroactive). Fortunately, only the net income (not revenue) is looked at once I hand in my taxes next year.
I'm self-employeed as a freelancer (in Germany) and can write off a lot of things as business expenses.
The legal details aside - just assume the general expenses can be written off – what would you recommend me to invest in, to establish my business, grow my personal brand and get more clients in the future?
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Any domains you get, services you pay for are also deductible. You could hire people to improve your website or marketing, get good copywriting done and pay for those and write those off.
Then a in a year or two you can take the remaining money out using dividends.
Fundamentally, it's a tax inefficient way of doing things, but it's the company making the money, while you're only earning whatever smaller amount you pay yourself.
Bit late for this income, as you've already been paid.
Parent -> Child
You invoice from Child and pay yourself and any costs from Child.
At the end of every year Child pays Parent any profits.
Parent can then use profits to: Investment, Buy Property, Create another Child that might make money
[DE]Glückwunsch zum ersten Kunden![/DE]
That sounds like a good plan, any specific items you can recommend? (education, etc.)
What if you setup GmbH and accumulate wealth there with no limits? Then it can pay you a small salary for private expenses to match your student grant limit. I think the grant should not limit you to be company owner/shareholder, unless you earn dividends.