Independent Programmers' No-Win Scenario

snydeq writes "Fatal Exception's Neil McAllister writes about the no-win scenario facing today's independent programmers: 'In a knowledge economy, programmers rank among our most valuable workers, yet the current legal and regulatory climate makes a career as an independent software developer virtually a dead-end prospect.' Section 1706 of the 1986 Tax Reform Act, the hurdles and costs of obtaining health care for one's own family, a hostile legal climate in search of accountability for any defects in code — these harsh realities make it 'easy to see why software developers would give up on entrepreneurship. For many, the risks simply don't match the potential rewards. Better to keep their heads down, not rock the boat, and hope they can hang onto their jobs until retirement.' Great news for big software vendors, which will be 'ensured an endless supply of programmers desperate for the safe haven of a steady paycheck, predictable taxation, health benefits, and a shield from civil prosecution when their code turns up buggy. But where will the next Microsoft come from? A field that discourages self-reliance sends the message that the status quo is the highest goal.'"

Comments

yeah. its much better to be p0wned

[FudRucker]

its much better to work for some huge soulless corporate pig where everything you create is owned by the pig and all you get is a measly salary and the pig gets richer and fatter while you wonder if you have enough to retire on at 65

Re:yeah. its much better to be p0wned

[sopssa]

It's hard to do anything as a beginner.

Of course, but the thing here is that you can't necessary choose the better way either, so you have to go by that. Of course it's easy to yell about "working for soulless big company like EA" from the moms basement, but that's not how it goes in the real world.

But the amount of such things you need to care of in the US isn't even bad yet. In other countries there's so many things you need to take care of it really, really puts you off. You'll be spending a lot more time trying to figure out all the overhead things than getting any work done.

You would need to right away get some lawyer to tell you everything little minor detail in law, an accountant to make sure you fill the complicated taxes correctly, take care of payment processing, and pay large amount of money for irrelevant things like health care and so on. If the workless people don't have to pay for health care, why should a beginning entrepreneur do so if they don't like to?

In beginning you really need someone. If you're an games programmer, this means someone that can handle the distribution and paying your share of it. PopCap and such might be good for a beginner.

On the internet it might also mean starting your site with no financial incentives first and hope someone picks you up, or provides funding and other expertise.

But yourself alone, as a newbie with no money to invest with - no, it's too hard.

Re:yeah. its much better to be p0wned

[s122604]

its much better to work for some huge soulless corporate pig where everything you create is owned by the pig and all you get is a measly salary and the pig gets richer and fatter while you wonder if you have enough to retire on at 65

When you have a wife a kid(s) depending on you, when health benefits for you/your wife/kids would cost 5 times as much (if they are available at all, if you have any kind of special needs, or pre-existing conditions, forget it) and half as good, then yeah, it does... The republicans like to burn sacrifices at the alter of "small business" and entrepreneurship, but they are full of it.. There are plenty of folks out there who have idea/dreams, who would go out on their own, but have to make the decision to stay in a job's that don't reveal their full potential, jobs they may even hate because of this..

Re:yeah. its much better to be p0wned

[Anonymous Coward]

As a Type I diabetic - big corporate is basically the only option for me.

Startups and self-employment are not options, yay for preexisting conditions!

Good news is that I'm an EE, not a software guy. EEs get shit on somewhat less by big companies.

Re:yeah. its much better to be p0wned

[cptdondo]

Yup. I had a successful small business that I sold a few years ago. I'd love to start a new business - I hate the current pointless grind I'm in - but I am, for all practical purposes, uninsurable.

My crime is that I am over 50, with numerous "pre-existing conditions" (read: I filed claims) and I have a wife and two small kids.

No insurance company will sell me health insurance for anything like reasonable rates. The last insurance policy I had cost about $15K/year and covered nearly nothing.

So instead of being part of the solution - the compnay I had employed 8 people - I am part of the problem, seeking a job that has good benefits and low demands.

Tell me again how not having universal health care is good for small business?

Re:yeah. its much better to be p0wned

[Archangel Michael]

When you have a wife a kid(s) depending on you, when health benefits for you/your wife/kids would cost 5 times as much (if they are available at all, if you have any kind of special needs, or pre-existing conditions, forget it) and half as good, then yeah, it does

We don't treat health insurance like insurance. Insurance is for EMERGENCY and RARE EXPENSIVE claims.

I know of one doctor, who no longer takes insurance because taking insurance cost him too much. He now can offer a regular checkup for very inexpensive cost, and he makes more money in the process. He doesn't have to hire two full time clerks to battle against the insurance companies, saving him tons of money. He doesn't have to get paid less for some people than for others. He charges ONE price for everyone and is able to provide better care and service.

Insurance companies are nothing but middle men skimming BILLIONS (or trillions) out of heath care each year. Those BILLIONS (or trillions) would be better spent on HEALTH CARE than insurance (paper pushing), however nobody is willing to even address THAT issue.

Re:yeah. its much better to be p0wned

[Grishnakh]

I would rather vote for an actual socialist before a so called libertarian. As far as I can tell that party is made up of nutbags and racist nutbags and homophobic racist nutbags.

You're confusing the libertarians with the Republicans, especially their "Tea Party" wing under Sarah Palin. Libertarians are people who favor smaller government, an end to the War on Drugs, an end to unnecessary foreign wars and military bases overseas, etc.

Re:yeah. its much better to be p0wned

[cptdondo]

Most of the rest of the civilzed world has universal health care, and none of the dire things you say have happened..... Maybe we (americans) can lay aside our arrogance for a moment and learn something from another country.

Re:yeah. its much better to be p0wned

[gangien]

How does this crap get modded up? libertarians are racists and homophobes? i'm not really sure how to respond to that, other than to say, the ideal of libertarianism is pretty much against any sort of collectivist thought, so we're by definition about as un racist/homophobic as you can get.

And nutbags? what's so nutty about any of the libertarian positions? if you think about them for half a minute, and don't just knee jerk react to the views, i don't think you'd find they're nutty.

Re:yeah. its much better to be p0wned

[Grishnakh]

He's partly right. The Democrats ARE ruining our country, and Obama IS leading us down a path of destruction.

The problem is that the Republicans (in Congress) are ALSO ruining the country, and if a Republican were in the White House, s/he would ALSO be leading us down a path of destruction.

Re:yeah. its much better to be p0wned

[DuckDodgers]

Reasonable political dissent doesn't get much attention in the media. When most people read "libertarian", they think of someone who wants to dismantle the government entirely and improve things by becoming a bunch of warring anarchist tribes battling for resources. Just like most people think a "green" is someone who would rather see people starve to death than drive to work in a vehicle that runs on fossil fuels.

Re:yeah. its much better to be p0wned

[Beardo the Bearded]

Public health care. I've had it for my whole life. I'm Canadian.

In BC (we're hosting the Olympics in case you don't own an Atlas) we have insurance covered by the Medical Services Plan. For a family, it costs about $120 every month. Everybody must pay it, with exceptions and pro-rating for those with low incomes (basically, under $35k a year and you don't pay.).

It covers your basic medical coverage. This is everything from surgery to bandages. I was born via c-section, as were my two kids. It cost me $0. My kids were hit by a car. It cost me $65 for the ambulance. I had heart palpitations a while back; I got a Holter, stress test, ECG, and bloodwork for $0. As for waitlists, I had chest pains and had an ECG within 15 minutes of arriving at a nearby clinic (and saw a doctor with whom I had no previous relationship.)

You can get extended coverage, available privately, which will cover dental, optical, massage, prescriptions, etc. Lots of jobs include this as a perk, and will often cover those MSP premiums.

If you don't have your "public option" then you simply don't have health care. Otherwise, insurance will only be available for healthy young adults. If I understand your constitution correctly, assassination is acceptable for those who would threaten that option. It is, technically, self-defence.

Your health companies are being very odd with this -- you can set the levels of basic care, and then let people buy extended coverage. We've got that up here. We just make sure you don't have to pick which finger has to get sewn back on or make you flash a CC before you see the OR.

Re:yeah. its much better to be p0wned

[cayenne8]

"You would need to right away get some lawyer to tell you everything little minor detail in law, an accountant to make sure you fill the complicated taxes correctly, take care of payment processing, and pay large amount of money for irrelevant things like health care and so on."

Really...it is not that hard. Honestly.

You incorporate yourself, I went for the "S" corp thing in order to be able to save on SS and medicare taxation (per the law), and to write off as much as I could. It works. Yes, it pays to get an accountant. She showed me the forms to fill, when to fill them...etc.

Yes, there is a good bit of paperwork, and you do want to keep good records. But I find it IS worthwhile to do so that you can keep more of your hard earned dollar. And if you like to be in control of your destiny, it is all about that too. I figure out my bill rates to include enough to let me take about 3 - 4 weeks a year vacation / sick time. I opened up a high deductible medical insurance policy which allowed me to open a HSA (Health Savings Account) which I can load up to the max pre-tax and use to spend on routine medical expense. I mean, really...anyone remember when insurance used to be called 'hospitalization'? Insurance should only be for catastrophic emergencies.

And you don't have to stretch the truth to get good money and keep good money. If it weren't a good thing...there wouldn't be quite so many people out there doing the independent contractor thing. If you can get into it...do govt. contracting!! Long term contracts that you can do 1099 with for years at a time.

However, if you are completely risk adverse..well, maybe it isn't for you. But if you are completely risk adverse...you're gonna have lots of problems in life. If you can't risk money for stocks and all...your savings WILL lose value in the long run.

And I've heard it put forth...you never get rich working for someone else.

And while I won't ever get really rich, I do enjoy the independence when I'm doing my own thing. I cannot stand having to "earn" vacation hours with each paycheck...figuring if I have time to take off for this or that. When working 1099, I notify the customer I'm gonna be gone 'x' days and I just go. I've figured it into my long term bill rate..so, I'm not losing any money.

Re:yeah. its much better to be p0wned

[cptdondo]

The anastheseologist will cost you $2,500. So will the OR itself. And the OR doc. And the X-Ray tech. And don't forget the guy who actually applies the cast. Each of whom is a separate entity, and bill you separately.

My kid's broken arm cost $7,500 for the ER visit, and another couple of grand for the cast work.

Almost $10K for something that should cost about $500 - the whole shebang took about an hour, so 5 professionals at $125/hr should work out to about $600.

Re:yeah. its much better to be p0wned

[dgatwood]

So we put in Libertarians and they deregulate businesses massively. Now those same big businesses can abuse their monopoly powers to ensure small businesses have even less of a prayer than they do under the D&Rs. Hardly an improvement, IMHO. Even the third-parties like the Libertarians are very much pro-big-business. There are basically no political parties that aren't, with the possible exception of the Green party (and it's possible that I simply don't know enough about their platform to see the giant flaws in it, too).

Re:yeah. its much better to be p0wned

[B4D BE4T]

This is a great example of why I think the current debate over US health care is focused on the wrong issue. The problem is not the cost of health care insurance, the problem is the cost of health care itself. Sure, there are many problems with health insurance, but the question we need to be asking is not "how do we pay for health care?" The question we need to be asking is "why is health care so expensive?"

It is ridiculous that simple things like diagnosing/curing a common disease or setting a broken bone cost as much as they do. It is even more ridiculous that these things are so expensive that we need insurance to pay for them. Bring the cost of health care down and we can save insurance for the uncommon stuff, which should bring the cost of insurance down as a result.

Re:yeah. its much better to be p0wned

[dgatwood]

The only reason the U.S.S.R. collapsed is that the U.S. had enough of an advantage in terms of their economic output and ability to incur debt to spend them under the table. The "Cold War" bankrupted the U.S.S.R., not socialism. Were it not for the isolation and the need to spend insane amounts of money on military spending due to fear that the U.S. would rule the world, they would still be around today, and they would probably be doing at least as well as China is.

Also, libertarians are *not* always socially liberal and fiscally conservative. They claim to be, but they almost universally favor corporate deregulation. That's anything but fiscally conservative; in many industries, every attempt at deregulation has consistently resulted in monopolies and higher costs in the long run. There are many industries where the most fiscally conservative position is actually socialism.... Health care, power production, telecommunications, and most other essential services fall squarely into that category.

What we need most are not people with ideologies like "socialism" or "libertarianism" or "liberal" or "conservative". What we need most are people who have brains and can think for themselves---people who look at each problem with fresh eyes, analyze the problem, analyze the possible solutions, and try to figure out the option that provides the best balance between improving the situation, causing the least overall harm, and causing the least discriminatory harm to any single group. Unfortunately, those people are too busy fixing what the politicians wreck to actually run for office.

Re:yeah. its much better to be p0wned

[dgatwood]

That's because their primary job is not to make the country better. Their primary job is to get reelected. This is why we need A. slightly longer terms (say eight years), B. term limits (one term, period), C. campaign spending limits, and D. a total ban on third-party campaign ads that mention candidates by name. That's the only way we'll ever fix this problem.

Re:yeah. its much better to be p0wned

[haruharaharu]

You forgot the part where the IRS is actively going after single person corps and slapping their clients with employment taxes on the rationale that the person is actually an employee. That sort of risk is hard to overcome when going for clients.

Re:yeah. its much better to be p0wned

[shutdown -p now]

Most of the rest of the civilzed world has universal health care, and none of the dire things you say have happened

Please read GP carefully. His "dire effects" are what happens when you have mandatory universal healthcare with no public option (i.e. you have to go and buy insurance from a private party), or when you have public healthcare which is non-mandatory (so you can opt-out and skip funding it). To my knowledge, there's no country which works like that today, and U.S. might just be the first one to get into that mess.

Universal and public healthcare works, of course. That's the point.

Re:yeah. its much better to be p0wned

[turbidostato]

"if you actually want to be the next Microsoft"

If you actually want to be the next Microsoft, you'd better start with a grandparent being president of a national bank, a million dollars in your account, a mother in direct connection with IBM's board of directors and quite a bit of luck.

Not so much for a starting.

Re:yeah. its much better to be p0wned

[ScrewMaster]

No we need an "American party". This partisan crap is getting as bad as all the nut-bag religions.

Not exactly. Like Lewis Black said, "The only thing stupider than a Republican, or a Democrat, is when these little pricks work together." That's why bipartisanship is good for the country. See, we already have more bad law than we could ever possibly use, so I prefer it when they waste time and energy arguing over some stupid bill rather than actually passing it.

Re:yeah. its much better to be p0wned

[ScrewMaster]

they would still be around today, and they would probably be doing at least as well as China is.

Unlikely. The U.S.S.R never developed anywhere near the commercial economy that is required to truly support a major high-technology military. They were not (and still are not) willing to allow their people enough elbow room to actually create something for themselves. Matter of fact, I would venture to say that China is doing so well because they learned from the negative example offered by the Soviet Empire, and are not making the same mistakes. Good for them, not so good for us (or the Russians, for that matter.)

Re:yeah. its much better to be p0wned

[drsmithy]

Tell me what Obama has changed.

I only have a rough idea of how the US system works, so I'm kind of curious - how many of those does the President even have the ability to "change" ? Are they not things that need to work through layers of politicians before they can be enacted as legislation ?

Not Completely True

[mikes.song]

I do well building a reselling software. I make most of my money off something I built two years ago. Working as an independent programmer for someone else may suck, but working for yourself is the only way to go. Build it once, and get paid forever.

Re:Not Completely True

[jDeepbeep]

Build it once, and get paid forever.

You're more optimistic than I am. I read that and think, 'build it once, and support it forever.'

Why now?

[WinterSolstice]

This article is more than 10 years late... is this just because the dude crashed his plane into the IRS building?

Most programmers/IT people have long gotten around this by having multiple contracts and/or multiple employees. It's not really all that hard, and if your independent company only has one contract and one employee you're basically already working for them.

This does not in *any way* discourage the next Microsoft. Or the next Google or Facebook, BTW... obviously, since both came up after this law ;)

Just SOP

[commodore64_love]

The corporations use bribes to buy politicians. The politicians write the laws the corporations wants. And the laws the corporations want are protective laws which discourage indepdent businesses (programmers or otherwise).

It doesn't matter whether we're talling about RIAA, Hollywood, Comcast, or Microsoft. It's all the same operating procedure.

Corporations should have their free speech rights taken away (lobbyists/bribes).
They have no more rights than a Tree or a rock.
They are not THINGS not people.

Yep, I've lost hope.

[GarryFre]

When I started working as a programmer some 15 years ago I had an AA degree in computer science. I learned on my own and wrote some pretty fantastic code. My first job was to write a multithreading app and I did well. Now I'm out of work and I can't get a job doing stuff that I could do in my sleep because I don't have a BA and I'm 54 years of age. I can't get a job, in a month or two I'll be homeless. I have pneumonia and I can't even afford to go to the doctor, stinking california denied my medical aid because I didn't state whether i was PREGNANT or not!!! Recently I decided my only hope is to go into business myself and now i read about this situation. Not a day goes by that I don't think about suicide and can only manage to get to sleep by pretending I'm dying. How pathetic I know but that's the way it is. Its over for me.

The next Microsoft?

[Angst Badger]

But where will the next Microsoft come from?

Nowhere, hopefully.

In all seriousness, this is typical of the point of view that only large, publicly-owned companies matter and that consumers are just a resource to be harvested by investors in the stock market. Personally, I care a lot less about where the next near-monopoly comes from than where the next generation of quality software comes from. And since it's generally not coming from the existing large corporations, TFA is at least correct in saying that the disincentives to independent development are a bad thing. But this is primarily a bad thing for consumers; there are always plenty of opportunities for the investors, though any given industry -- such as software -- may not be a hot deal at any given time.

Re:Deploy offshore

[Grishnakh]

I wonder if it'd be easier for independent software contractors to simply move to Canada, and then contract with US-based companies, doing work remotely?

Re:Why just programmers?

[commodore64_love]

>>>Most all other occupations face the same challenges and pitfalls.

No. The U.S. Congress passed a law that specifically targets programmers. Quoting a previous slashdot article: "Section 1706 of the 1986 Tax Reform Act. Under the law, certain classes of workers, including anyone who engages as a "computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work," are considered de facto employees for tax purposes, regardless of whether they claim to operate their own businesses as independent contractors. The IRS can impose significant tax penalties on companies who hire such workers as contractors rather than full employees, a fact that can make it extremely difficult for self-employed programmers to find work."

An engineer can be independent designer, and yet still find work with someone like Lockheed.
A programmer who is an independent will not be hired, due to Lockheed being afraid of the IRS punishment.

More news at 11

[BitZtream]

Yes, working in a group makes it easier than working by yourself.

Thats why companies exist, they can be more productive and efficient than a single person if they properly pool resources and talents.

Accountability in code defects? Lawsuits? Are you fucking kidding me? What universe do you live in where this is happening? Certainly not the one with Microsoft or Toyota in it.

Hold on to their jobs until retirement? Yes, the industry is no longer a fledgling industry. Yes businesses are getting better at figuring out who is actually useful as a programmer and who just happened to pass some courses at the college they went to. The article confuses the industry coming of age and realizing how useless most of the people who claim to be in it are and people not being able to hold on to a job.

People get fired because they are less valuable than something/someone else that can replace them or the need for them has simply went away. Yes companies try to cycle through low cost employees as a way to cut costs, but they end up moving so slowly after a short period of time that they disappear quickly and account for a small percentage of the workforce.

Reality:

Working independently and competing against people who work in groups is generally hard. Doing it as a programmer is no different than doing it as a plumber, with one exception. The plumber isn't so retarded as to expect it to be any different nor do they have the sense of entitlement to think that it should be different for them.

Plenty of people DO go it alone. Happens constantly all the time. The company I work for actually works with more self employed people than companies.

Its not impossible, it just takes effort and is harder than working for a company with shared resources. Yes there are some silly laws aimed at software developers working on their own, but there are also some silly laws aimed at plumbers working alone. God, slashdot would just keel over dead if governments started requiring developers to be licensed and show they are qualified to do so like MANY MANY other professions.

I have a better question:

Why is it IT people in general feel that they are somehow different than everyone else in the world? Are they really so ignorant and socially dysfunctional to not realize that they are no different than any other part of society in any way? Is this ignorance or a form a geek elitism, thinking that we geeks can't possibly be expected to suffer under the same working conditions of the rest of the pathetic planet of idiots?

socialized medicine...

[Sleepy]

It's funny how all the big-business fat cats claim that "socialized healthcare" is bad for SMALL business, when yeah... lack of affordable self insurance is the PRIMARY reason many dreamers never give their nagging small business idea a go...

Re:socialized medicine...

[rochberg]

That's the approach we take for food, which unlike medical care is a constant necessity for everyone. Poor people get subsidies, but the government doesn't own or micromanage farms or grocery stores.

You've obviously never heard of agricultural subsidies. The U.S. government pays $16 billion per year (a large chunk goes to corporations like Monsanto) to make food cheaper. So, no, the government's approach to food is not capitalist. They are helping you pay for it...just without your knowledge.

Re:socialized medicine...

[Anonymous Coward]

The U.S. government pays $16 billion per year (a large chunk goes to corporations like Monsanto) to make food cheaper.

From your link WHICH YOU CLEARLY DID NOT FUCKING READ: "US corn ethanol subsidies are between $5.5 Billion and $7.3 Billion per year, and US ethanol producers are protected from imports of cheaper Brazilian ethanol by a 54-cent-per-gallon tariff." Having a high tariff on imports does not make food cheaper for me. Requiring that 10% of my gas be ethanol (which lowers MY fuel economy by 10% or more) does not make food cheaper. In fact, it makes both gas and food more expensive. Just because Farmer Joe is getting a back rub from Uncle Sam, that does not mean my grocery bill is lower.

Re:Bagh! - Good luck with that!

[mswhippingboy]

I was an independent contractor/developer for over 15 years and it was great. However, the dive in the economy and the items mentioned in the original post have squeezed things so much that large contracting organizations are swallowing up all the work and forcing independent contractors to roll over or hit the road. It doesn't matter what you know or how valuable to their clients. Decisions are made from the top of the organizations and middle management has little or no say about it.
I've been in software development for over 30 years and have always kept my skillset crisp and current. I've worked as W2 and 1099 over the years and I like 1099 much better (eg. no politics, focus on the task at hand rather than on corporate culture, more say in what and how I do things, etc.). However, unless corporations begin to operate like small companies (where the end product and customer satisfaction matters rather than maximizing share price at any cost), I don't see much hope for the future of independent developers. That is if making a good living matters. Granted, to some $$$ is secondary to enjoying what you do, but those of us with kids to: put through college, help with healthcare, supplement income due to the crappy job market, etc, it matters more than personal satisfaction.

What a whiny load of crap.

[Low Ranked Craig]

Step 1. Form an LLC. It's not hard, you can do it yourself for under $100 in most cases

Step 2. Get an EIN number from the feds. Free and easy

Step 3. Open a checking account for your new LLC. might require a credit check.

Step 4. Get a decent accounting package.

Step 5. Keep track of EVERY business expense. Keep milage logs in your car. Keep receipts. What percentage of your utilities, etc are business related? Track it.

Step 6. If you think you need the additional coverage get E&O Insurance. It can be pricey, true. On the other hand if you LLC doesn't have a lot of hard assets, why worry?

Step 7. Get health coverage. We found insurance through a local trade group for $600 a month for my wife and I. Pay it out of the company, it's a write off.

Step 8. Work your ass off and enjoy the benefits of being able to write-off things you probably would have purchased anyway.

This should have been step 6 - get a good tax guy (or girl) to help you figure shit out.

Now get creative. Like to go to theme parks? Set up another LLC and create a website dedicated to reviewing them, talking about which ones have what etc. Now you get to write off trips to Six Flags and Cedar point as legitimate business research.

Life is far more enjoyable when you do what you want, when you want, for whom you want. All the accounting is a pain in the ass, yes, but not as big of a pain in the ass as working for Bill Lumberg the rest of your life.

Re:What a whiny load of crap.

[digitalhermit]

If it worked like that it would be awesome. But it doesn't.

Say you are an independent programmer with EIN in hand. You walk up to Acme Industrials and present your resume and EIN. They contract you because, dammit, you're really good. A few months go by. You're very good, and love the independence of contracting. So good, in fact, that Acme renews your contract. Life is good.

Tax season rolls around. The government says, "Hey Acme, your awesome programmer contractor is really an employee. You owe us 30% of his salary in withholding tax. You owe use unemployment taxes. You owe us social security taxes. You owe use these other fees. And you're late on paying for the past three years also. Pay or lube up."

Acme gets rid of the awesome contract programmer who is so damn good that he doesn't need an agency to find him work. Well, at least he didn't before.

Re:What a whiny load of crap.

[rjstanford]

Not the case, actually, which is why very few companies will actually contract with INDIVIDUALS any more. Any company working with an LLC or a C/S class corporation is automatically covered. Its impossible to hire a corporation, therefore they can't possibly treat you as an employee, so this situation never comes up.

Working as an independent on a 1099 basis is almost impossible. Hence step one, forming an LLC.

Re:What a whiny load of crap.

[CodeBuster]

IANAL, but as I understand it one has 5 years in the US to show a profit or the IRS will deem the business to have been "declared in bad faith" (i.e. as a tax dodge) and you will owe back taxes and penalties for any write offs or other tax benefits derived from the illegitimate "business". This can happen even if you honestly were trying but just couldn't get the business off the ground. This sometimes happens to people who try to turn a hobby into a business for tax purposes.

Another reason to escape the USA

[gestalt_n_pepper]

Panama, the Bahamas, Canada. Citizenship can be had elsewhere. If I was starting a company tomorrow, I'd incorporate offshore, hire offshore and only make my software available via download or as a web app. The USA/IRS might try and tax me for domestic downloads. Good luck with that guys.

If the USA wants to make it difficult for independent software developers or other independent entrepreneurs to do business in the United States, I'm sure that those independents will be happy to oblige them - by taking their money, talents and ambition elsewhere.

Outcompete lawyers

[Kim0]

Stuff like this is an attack on programmers from people with lawyer education.

We damaged or destroyed the music industry.
We could do that to lawyers and judges as well.
Considering their general low quality, they could in most cases be replaced with simple machine intelligence and data mining. Do this with open source and collaboration, and they will be displaced just like peopled stock exchanges.

Of course there will be a transition period, but when computer guided actors playing lawyers in court rooms win significantly more cases than real lawyers, and computers are better at judging than judges, people will treat them as the obsolete guild they are. The survivors will be lawyers that understands computing.

Kim0

Re:Ask Joe Stack

[h4rr4r]

He was a fucking tax cheat not an independent programmer.

Most valuable my ass

[rahvin112]

In a knowledge economy, programmers rank among our most valuable workers

Got a complex or what? Given the audience I'm probably gonna burn some Karma here but, There are a dozens of professions I would put before programmers, maybe even hundreds, as the most important professions in civilization, regardless of development level (Nomadic, Agrarian, Industrial, Information). Lets start with Doctors. I'd value my health far higher than a program to balance my checkbook. Next Nurses, as I value my health to have doctors, Nurses are a critical component to make that happen much more than a web browser. Next, Civil Engineers, as I value having a roof over my head (rather than living in cave), clean potable water in my pipes, sewage lines and treatment plants, roads to move myself and goods on and bridges to cross bodies of water and ravines much more than a value software for digital pictures. Next Mechanical Engineers, I'd value cars, planes, boats and machinery to make things, machines to move goods and people, machines to build things and simply to provide an industrial economy much more than a software of any kind. Next, pretty much the rest of the traditional engineering professions. Next Any military career, as I value the defenders that prevent others from taking my life, loved ones or lively hood much higher than software to play games.

I could go on, but I'd put software programmers near the bottom of the list as the most important professions in civilization. Anyone putting software developers near the top of most important professions frankly has a mental disease involving some sort of superiority complex. Personally I'd rank software developers right up there with Telephone Sanitizers, Hair dressers, salesmen, middle managers and Executives on the most important to civilization.

Re:Most valuable my ass

[MarcoAtWork]

let's see which ones of those professions depend on software nowadays:

- doctors/nurses/medical, think that MRI machine is mechanical? what about that CT scanner? or simply the gizmo that charts your BP/pulse?
- civil engineers: think they are still using drafting tables to come up with buildings? or hand-write calculations for those bridges?
- mechanical engineers: do you think that cars today are fully mechanical? airplanes?
- rest of traditional engineering: electrical engineers do again everything on paper?
- military: I am sure they'd love to go back to scouting parties instead of satellite imagery

unless you want society to roll back entirely to the 1930s/1940s I think you might want to reconsider putting software developers at the same level as telephone sanitizers...

Re:Deploy offshore

[tophermeyer]

Yes, but the stereotype is that the care that Canadian citizens receive comes slower and is of poorer quality than we expect in the US. In reality, I'm sure that most of that comes from Canadian Doctors recommending comparatively more conservative treatment methods, which keeps costs down, which ensures that healthcare is affordable enough for the state to provide.

One reason American healthcare is so expensive is because it is possible for providers to pursue extravagant and unnecessary procedures in order to draw profit from insurers, like commuting in an 18 seater SUV when a small compact car will do (Oblig. car analogy). This drives up insurance costs, which makes it harder to afford.

no one told me I shouldn't be winning

[mt1955]

About this time last year I was working as the IT manager for a multinational manufacturer. The IT group was targeted for yet another round of cost-cutting; they gave me an hour to decide who would get a buy-out package and a shove out the door. I talked them into letting it be me, put the buy-out money in a rainy day account and started my own software company. I told my wife that if we weren't cash positive within 6 months I would give it up and start looking for a real job. Over the last 12 months we've made more than they were paying me in the "real job" and we've never actually had to fall back on the rainy-day account, in fact we've almost doubled it.

Starting my own company was not easy. I have to sell, communicate well, be easily accessible 7/24 and give my clients plenty of sound business reasons to keep coming back in between turning in top quality work on time. I'd have to work my a** off and most days are 12~16 hours long. I have still managed to take two vacation weeks since I started and we have a third week schedule for May... on vacations I do have to keep one eye on my email and be willing to get up a few hours early to handle anything that can't wait until we get back.

There are no sick days or personal days. Working for yourself means you both have all the time in the world and no time. Before when a stupid boss would make unreasonable demands or mistakes I just had to deal with it. When a client makes unreasonable demands I just charge more. They can be as unreasonable as they want $$$

To start your own company, software or otherwise;

- be prepared for long hours, don't let a client down even if it means pulling all-nighters until your not sure what day it is
- force yourself to learn the new things consistently, figure out where your clients need to be 6 months from now and learn or do whatever it takes to be there waiting for them
- find an accountant you trust to handle the tax laws
- find an attorney you trust to handle the legalese

I've never been happier in my career.

You're not winning. You're losing horribly.

[jeko]

"and most days are 12~16 hours long"

Do you have kids? Do you plan to? You work 12-16 hour days constantly and they will end up pregnant addicts. NOTHING screws up your kids faster than parents who don't have time for them.

on vacations I do have to keep one eye on my email and be willing to get up a few hours early to handle anything

That's not a vacation.

There are no sick days.

You are one car accident away from bankruptcy.

When a client makes unreasonable demands I just charge more.

No, no you really don't. Been there, done that. Over time, clients expect you to constantly get cheaper. In time, you'll find yourself competing against third-world labor.

don't let a client down even if it means pulling all-nighters until your not sure what day it is

I see you have your cardiac arrest penciled in for next year. What does your doctor think about this plan?

I've never been happier in my career.

Been there. Done that. Talk to me about how you feel after three years of this.