Free Agent FinanceCategory
Business structure: sole prop, LLC, or S-Corp
The legal shape of your business changes three things: your liability exposure, your paperwork burden, and — depending on how you're taxed — your bill to the IRS.
Every freelancer already has a business structure, whether they picked one or not. Do nothing, and you're a sole proprietor by default — the simplest setup, but one where your personal assets and business assets are legally the same thing. Form an LLC, and you add a liability wall between the two. Elect S-Corp tax treatment on top of that, and you change how your income is taxed, potentially reducing what you owe in self-employment tax.
None of these are permanent. Most freelancers move through them in order as income grows: sole proprietor while testing the waters, LLC once there's real revenue and risk to protect, S-Corp election once net income is consistently high enough that the payroll paperwork pays for itself.
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Business structure guides
LLC vs S-Corp for Freelancers: Which Saves You More
A side-by-side breakdown of taxes, paperwork, and payroll for each structure.
Sole Proprietor vs LLC: Do You Actually Need One
What an LLC protects against, and what it costs.
How to Form an LLC as a Freelancer
The step-by-step formation process, in order.
EIN for Freelancers: Do You Need One
Free directly from the IRS, and how to get it.
When to Elect S-Corp Status
The income threshold where it starts paying off.
Business Licenses and Permits
The local requirements freelancers often miss.
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