Employment

The Journey So Far

09/25/2015 by John 2 Comments

Since leaving Asheville back in May, our trip has taken us from the depths of the Grand Canyon to the heights of the Empire State Building. Along the way, we have traveled over 10,000 miles and crossed the borders of 23 states and 1 foreign country. It has been a memorable journey so far.

It has been a gift to have the time and resources to make this trip. We have had some amazing experiences including participating in the Bryce 100, canoeing down the Green River, and bicycling into Quebec. Our travels have given us the opportunity to reconnect with old friends now far flung across the country and to spend extended periods of time with our family.

We are back in the Southeast now, and as the heat of summer finally begins to dissipate, a new phase of the journey is about to begin. Our bank accounts won’t allow us to continue traveling indefinitely and for now, our restless urges are satiated. We are preparing to get back to work. We will spend October working bicycle tours in the Outer Banks before settling down for the winter months in Southwest Florida where Mary will work as a nurse in Naples and I will cook for the staff and students of North Carolina Outward Bound in Everglades City.

Although it has been challenging at times, being homeless and living The Dirtbag Way has not gotten old yet. We will enjoy being in one location for a few months, but we have no intention of staying put long term anytime soon. The freedom and lightness we are experiencing right now is far more appealing to us than the weight of responsibility we were feeling as full-time employees and home owners. So as we wind down into a period of relative stability, thoughts of the next adventure will fill our days and our nights will be consumed with dreams of the road.

The Things I’ve Missed While Not Working

07/31/2015 by John Leave a Comment

I’ve been back at work leading bicycle tours in the Finger Lakes the past few weeks after a month plus of being on the road. I enjoyed our trip out west immensely, but as I’ve talked about before, it’s not a vacation, it’s a life we’re trying to lead, and a life without being in a fixed location has its challenges. Being back at work helped me to identify three things I’ve been missing while on our recent adventure.

Minimalism
Structure
Movement

Minimalism

It’s ironic that these things all could have been a part of the journey we’ve been on. When we traveled to New Zealand back in 2012, I managed just fine with only one carry-on size backpack that included both clothing and camping equipment. Now the entire back of our car barely seems able to contain the things we seem to think we need. It is yet another manifestation of my ongoing struggle with stuff.

Structure

Though it’s been nice to have days on end with no set agenda, I have missed having some structure to my days. While working bicycle tours my day is planned out almost to the minute from pre-dawn until after dark. It has been nice to not have to suffer from decision fatigue during the past few weeks.

Movement

Yes, I ran 100 miles recently, but since that day and up until beginning work again recently, my level of physical activity had plummeted, leaving me cranky and irritable on more occasions than I care to admit. Being physically active is such an important part of staying sane for me and even on my days driving the van while working, there are still plenty of opportunities to use my body while moving guest’s luggage around, loading and unloading bicycles, and just generally running around trying to get things done.

So, I’ve been enjoying my time back at work. The minimalism, structure, and movement it provides are a welcome change from our last month on the road, plus the coffers need refilling to stock up for the next adventure. Hopefully, I can take some of these habits with me when we begin our travels again in August.

Tax Season Lessons: Independent Contractor Income

04/15/2015 by John Leave a Comment

1099 Tax Form It’s tax day everyone. This is the time of year when I’m normally dreaming about how to best enjoy my refund. Not this year. This year I am writing checks instead of receiving them. Nearly $1000 just disappeared from my bank account. Why? Independent contractor income.

In 2014, I spent a little under a month total working as a bicycle tour guide. This has been about average for me over the past few years. I work these tour as an independent contractor. As such, the checks I receive from the company have no taxes or social security contributions taken out of them. At the end of the year, instead of a W–2, I receive a 1099-Misc Income form listing my compensation for this work. It is my responsibility to pay what would have been automatically deducted from this income had I been an “employee” of the company.

I recently learned that the tax rate for 1099-Misc income is 25%! This rate is 10% higher than the tax bracket that my total household income falls under. In other words, the work I do as a bike guide gets taxed as if I make a far greater annual salary than I do. Ouch.

Most years this has not been a problem. I think that’s just been luck. I’m guessing the payroll deductions from my other income made up for the difference and still left enough overpayment to receive a refund. That was clearly not the case this year.

As I set out on a new adventure in 2015, I will be working a lot more as an independent contractor. I’m not going to leave it up to luck this year and hope that there’s not a big bill coming due again next April 15th.

Here’s what I’m going to do:

Keep an envelope and mileage log in my car and track every mile and meal I buy traveling to and from my work assignments. These items can be classified as business expenses and in 2014 reduced my 1099-Misc taxable income by $790.
Continue to deposit my paychecks into a high yield savings account
Take 25% of each of these paychecks and put them into a separate high yield account called Taxes
In six months, assess how much money I’ve made as an independent contractor in 2015 and how much I think I’ll make over the course of the rest of the year.
Based on this assessment, decide if I need to pay estimated earnings taxes out of my Taxes account.
In April, use the money in my Taxes savings account (which has been making a little extra money for me in the mean time) to pay the taxes I will owe.

Though this has not been a pleasant experience, I have learned my lesson and will be more diligent about my tax responsibilities as an independent contractor from here on out. The freedom of picking up work that I want to do when I want to do it is worth the cost of having to do a little more financial management.

Do any of you have experience dealing with 1099-Misc income?

Any tips you would like to share about how to manage taxes?

My partner Justinn here at The Dirtbag Way is also not enjoying tax season, but for an entirely different reason. Read her post to learn more.

Tax Season Lessons: The Affordable Care Act