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What’s the Best Legal Structure for Your Freelance Business?

This post originally appeared on BusinessNewsDaily on February 2, 2017.

When you’re a freelancer, you’re also running a small business. Being self-employed inevitably makes tax season complicated. That’s why many freelancers have chosen to establish their own businesses legally.

There are three types of business structures most freelancers register under: sole proprietor, LLC and S corp. There are advantages and disadvantages to all, such as better tax breaks or filing a separate tax return. Each situation allows you to deduct for business costs, such as internet or travel.

Why create a legal business?

Although many professionals who freelance on the side simply report their earnings as “miscellaneous income” via the Schedule C (1040) form on their personal tax return, full-time self-employed individuals may find it beneficial to create a legal business entity.

Lauren Saccone, freelance writer and social media consultant, recently established an LLC called Pitchbow at the end of 2016. After freelancing part-time for nearly a decade, she has been a full-time freelancer based in New Jersey for the past two years.

Saccone’s tipping point was filing her taxes for 2015.

“I didn’t know anything about filing as a freelancer,” she said. “I had to figure it all out myself at the last minute, and it was an informative experience, but (it was) stressful.”

Read the entire story on BusinessNewsDaily below:


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