7 Must-Have Freelance Forms

If you're interested in having more control over your work, hours and earnings as well as the ability to try new things, you might consider getting into freelancing. But before you start seeking clients, you'll need to become familiar with the documentation you'll encounter as a freelance business.

Some important forms for freelancers serve to protect you financially in the work you do and make it easier for you to get paid. Others help with the tax filing process or are a legal requirement for some freelancers. Here are seven key forms that freelancers should have.

When you get started freelancing, you might want to go ahead and jump into completing work for people to start bringing in some freelance income. However, you should never do so without having signed an independent contractor agreement with the client. This form helps legally protect you both during the work arrangement. Such contracts will state all the terms of the freelancing working agreement such as the following:

• How long you and the client will be doing business with each other
• How compensation will work
• How services get performed
• Who supplies which materials
• How you both will resolve disputes
  
• When and how the agreement can end
• Whether you have specific licenses, insurance and credentials
• Who pays relevant taxes (usually the freelancer)

Without a work agreement, you could lose financially if the client doesn't pay you as they said they would since there wouldn't be written evidence to back up your claims. You could also run into headaches where the client tries to change terms or ends the working relationship for no reason. The IRS also finds these contracts important at tax time for clients to have to ensure that worker misclassification doesn't occur where the client treats you like a full-time employee but without the benefits or protections.

After you've signed a contract to work as an independent contractor for a client, you may need to draft a proposal for the work the client needs before you get started. This form gives you a chance to establish exactly what type of work the client needs from you, how much time and money it will likely require and which final products and included services fall within the scope of the project. Your proposal might include a timeline, available upgrades like rush delivery and terms like which payment methods you'll accept and who keeps any copyright.

As with independent contractor agreements, work proposals can protect you financially since they establish clear expectations and conditions for the work between you and the client. So, if the client later asks you to do more work outside the project's scope or changes their mind later on agreed terms, you can refer to the agreement rather than potentially lose time and money. The proposal also serves as a helpful reference on the project requirements as you continue working.

​Read More​: Going Freelance: 7 Things You Need to Know

When you worked as an employee, you didn't have to worry about asking your employer to pay you since you received regular paychecks that your employer fully handled. But as a self-employed individual, you can expect to need to invoice your clients for the work you perform so that you can get paid through the method to which you agreed. Although you can choose from manual and electronic invoicing systems that also work with your small business bookkeeping system, you'll likely find the need for invoice templates at some point that you can customize and send to clients.

This type of form for freelancers often includes your name, contact details, any logo you use and an itemized list of the work performed with descriptions, rates, quantities and total pricing. Other common items on invoice templates include an invoice number, due date, payment terms and any notes to the client such as the payment method to use. You can find such templates through programs and services like Google Docs, Microsoft Word and Freshbooks, or you can create your own.

Some clients will have you fill out IRS Form W-9 (Request for Taxpayer Identification Number and Certification) regardless of how much you plan to earn freelancing for them. However, the Internal Revenue Service requires that freelancers complete this form anytime they expect to make ​at least $600​ from the client during the tax year.

The client needs this document since it includes your tax identification number – usually, your employer identification number or Social Security number – and will become useful when the client sends you a tax form that reports compensation made to you. The W-9 form gathers other important information such as your name, address, business classification and backup withholding status too.

​Read More​: What Is a W-9 Tax Form?

To accurately determine your freelancing profits and report all the necessary information on your tax return, you'll need to have documentation backing up purchases and business expenses you've incurred while operating. Such items may include forms like invoices for supplies, professional services or insurance, as well as other documents like credit card statements, receipts and canceled checks.

You'll find these handy for creating financial statements for your business since you'll be able to subtract applicable costs from your income and better assess your business's profitability and stability. Your tax return will also ask you to report expenses on IRS Schedule C (Profit or Loss From Business), and the documentation can come in handy if you ever get audited and the IRS wants proof you actually spent that money.

​Read More​: Self-Employed Tax Deductions, Benefits & More

Another important form for tax filing that you'll likely see as a freelancer is IRS Form 1099-NEC (Nonemployee Compensation). You should receive this in late January or early February from any client that paid you ​at least $600​ for work the last tax year, but some clients send you this form for any amount of work completed. The form will include basic information about you and the client, along with the amount of compensation and any taxes withheld.

You'll provide a copy of this form to your tax preparer or fill in data from the form if you do your own taxes. You should note, however, that not receiving a 1099-NEC from a particular client doesn't mean you don't have to report the money earned or pay taxes. Instead, you'll need to gather earnings data from other sources like bank statements or client invoices. In the past, Form 1099-MISC was used for freelancers, but today it is Form 1099-NEC.

​Read More​: What Is Form 1099-NEC?

A big difference between working as an employee and freelancing involves how you pay your taxes. As a freelancer, the responsibility falls on you to calculate how much you'll owe each year based on your earnings, expenses and potential credits and deductions and then send the IRS estimated taxes every quarter. Further, you have to pay a ​15.3 percent​ self-employment tax that includes Medicare and Social Security taxes along with your federal income tax. As an employee, you'd only pay half this amount due to your employer paying their share.

The IRS provides Form 1040-ES (Estimated Tax for Individuals) along with some worksheets that help you estimate the taxes you'll owe and split the total by quarter so that it's easier for you financially. You'll want to provide as accurate an estimate as possible so that you don't end up needing to pay more or face underpayment penalties later when you do your income tax return.