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More and more people are their own boss these days. Startups, freelancing jobs, and the gig economy only make self-employment easier. What isn't so easy is navigating the legal implications of self-employment -- the tax, retirement, and health insurance implications of being out on your own.
So consider this your legal start kit for self-employment; it's like a list of must-read information for your "nano" business of one:
Little Business, Big Tax Implications
The most important, and possibly most time-consuming, aspect of being self-employed is figuring out how your tax liability will change. After all, when you're just an employee, your boss takes care of all that. Now you're the boss, and it's on you to figure this all out. But here's a good place to start:
The Benefits of Self-Employment
What about all those perks of being employed, like retirement and health insurance? The good news is you can have a 401(k) if you're self-employed. The only hitch is that you're going to have to find, set up, and administer the retirement plan yourself.
The same is true for healthcare benefits. Self-employed individuals are eligible for Obamacare, but you need to go through the federal health insurance marketplace. One thing you should be aware of is you may be responsible for your own workers' compensation insurance if you want to get paid if you get injured on the job.
Who Are You?
If you're self-employed, chances are you've worked hard to make it that way. But you're still going to have clients and people who pay you. Make sure you keep that relationship clear and that both sides understand you are your own business, or at least an independent contractor and not an employee. Both businesses, contractors, and the self-employed can get into trouble when those lines are blurred.
Before starting your self-employed career, you may want to talk to an experienced employment law attorney near you.
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