Freelancer Glossary — Business Terms Explained

A U.S. tax form series reporting income paid to non-employees. Clients may issue Form 1099-NEC when they pay you above IRS thresholds. It does not mean taxes were withheld — you often owe self-employment and income tax separately.

Money you spend to operate your freelance business that may be deductible against income, depending on local rules. Common examples include software subscriptions, equipment used primarily for work, and professional fees.

A written or electronic agreement that defines what you and the client will do, when, for how much, and what happens if things go wrong. Verbal deals are harder to enforce; contracts reduce ambiguity.

A document that reduces an amount owed or records a refund against a prior invoice. It preserves an audit trail and is typical after returns, billing corrections, or goodwill adjustments.

A concrete output you agree to hand over — a file, report, design export, or deployed feature. Clear deliverable lists prevent “I thought you’d also…” conversations.

An upfront payment before work begins, often used to cover initial time and materials or reduce client no-show risk. Deposits should be spelled out in your contract and applied to the final balance.

Payment terms meaning the client should pay as soon as they receive the invoice, rather than waiting a NET period. Still clarify how “receipt” is determined (email delivery vs. postal).

A proposed price and scope for work not yet finalized. It communicates likely cost and timeline before both sides commit; once accepted, you usually follow with a contract or invoice schedule.

The price of one currency in terms of another. Freelancers billing internationally should state which currency is authoritative and whether quotes float with FX or lock at signature.

The last installment when remaining work is accepted (or a defined handover occurs). Tie it to objective completion criteria so “one more tiny change” does not stall payment forever.