The COVID-19 The pandemic has created more opportunities for remote, self-directed and freelance work ever. Today, about 10 million Americans say they are working for themselves in some way.
The opportunity to work from anywhere is appealing to many and raises an interesting question: If you could work from anywhere, where would it be?
To help you answer that question, we put together a list of the 10 best cities for freelancers in 2022. Our underlying analysis, which used recent metro area data from the US Census Bureau and state-level data from the Federal from State Tax Administrators, find signs of relatively affordable rent; these metropolitan areas also seem to have vibrant and growing independent cultures, as well as a growing demand for goods and services. Here is the list.
Top 10 Metropolitan Areas for Freelancers
1. Greenville-Anderson, SC
2. City of Boise, Idaho
3. Columbus, Ohio
4. Des Moines-West Des Moines, Iowa
5. Ogden-Clearfield, Utah
6. Raleigh-Cary, North Carolina
7. Worcester, Mass.-Conn.
8. Chattanooga, Tenn.-Ga.
9. Winston-Salem, North Carolina
10. Knoxville, Tenn.
Key results
- Many of the top 10 cities for freelancers had relatively low housing costs. According to Census Bureau data, 51.6% of US renters paid less than recommended threshold of 30% of gross monthly income. And some metro areas were well above that average, meaning they had higher shares of people with relatively affordable rental expenses. Renting can make or break some freelancers. “Your number one strategy should be to keep your overall costs as low as possible when you’re starting out,” said Lori Martinek, a Los Angeles-based Certified Mentor for SCORE, which is a national nonprofit that offers free resources to homeowners. of business. .
- In the top cities for freelancers, unemployment was often relatively low and jobs were being added. A good labor market and influx of workers may indicate a growing demand for goods and services by the self-employed. The top 10 metro areas tended to be high performers in these areas, and all saw net increases in the number of people hired there in 2020.
- The size of the self-employed community is notable in many major metropolitan areas. Nationally, 5.8% of workers were self-employed at an unincorporated business, according to 2019 data from the US Census Bureau. Several of the metro areas on our list exceeded this percentage, which suggests that they had rich and active environments for temporary workers, independent contractors and freelancers.
- Minimum state tax rates are relatively low in many major cities. Although deductions, credits, filing status options, and tax rules make it difficult to predict what any self-employed person’s tax burden will be, minimum state income tax rates can indicate whether bills Self-employment tax rates may be higher or lower in certain locations.
Deciding if and where to move
Moving isn’t easy or cheap, so deciding when to move your freelance life to another city can be tricky. Business experts say there are three things to keep in mind when contemplating a move.
1. UNDERSTAND THE TAX EFFECTS
The bigger the city, the more it costs to live, said Jonathan Medows, a certified public accountant with Medows CPA in New York City. State income tax brackets and rates vary, and in some places there are even new or additional taxes to consider. Medows’s hometown of New York City, for example, has a city-level income tax, in addition to state and federal taxes; Freelancers moving there may have to consider raising their rates to offset the additional tax expense.
2. DON’T JUST START YOUR LIFE
Medows recommends a preview trip. “Dip your toes. Go for a couple of weeks. Work there. See if it’s something that’s viable. Moving is expensive and I’d like a pilot trip,” he said. That will also give you the opportunity to collect the tax and license information he needs.
“So number one, get a disposition of the land; understand the county, state and local taxes. Number two, understand if you need any business licenses,” he said. “Number three, see if your good or service you’re offering is subject to sales tax and register for sales tax.” Zoning laws should be another consideration, adds Medows.
Once you’ve moved in, go to your local bank and set up your account in person, Martinek said. “Go meet the people at the bank, tell them what you’re trying to do. And they’ll put you in touch with other organizations and other small businesses. It happens over and over again,” he says. “They want to help you because they want to see your business grow.”
3. KNOW WHEN LOCATION IS IMPORTANT AND WHEN IT IS NOT
“One of the great things about being a freelancer or independent contractor is that you can literally live and work anywhere that has a high-speed Internet connection, nationally or internationally,” Martinek said.
However, location cannot solve everything. “Things that location can’t fix include, for example, not having a business plan or having a valuable skill or service to offer,” Martinek said. Also, certain types of work may only be available in specific areas: freelance camera work opportunities in areas with lots of TV and movie sets, for example. “You can be in the busiest city in the world, but if you can’t get any business for what you’re doing, then you’re in the wrong place,” Medows said.
To compile its list, NerdWallet analyzed data for major US metropolitan areas from the US Census Bureau. We also pulled state tax rates from the Federation of State Tax Administrators. We weighted the impact of each factor based on how important we felt that factor would be to a freelancer’s potential financial success. We excluded metro areas for which census data on job-to-job flows were absent or negative.
This article was provided to The Associated Press by the personal finance website NerdWallet. Tina Orem is a writer at NerdWallet.