

Ask: Difference b/w freelancer, contractor, being in business (starting an LLC)? - daveroon

I recently quit my job, and I've been doing projects / gigs for a bunch of people. I'm new to the world of self-employment, and hear these words (freelancer, consultant, independent contractor, llc etc.) thrown around. Whats the main difference? And should I be worried about anything in terms of legal / taxes?
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SimonPStevens
In my view a consultant is different from a freelancer.

Freelancers (and contractors) generally are taken on to do a specific job,
they do it, and then they leave. Consultants on the other hand come in to
advise, and when they have finished advising they leave some form of
documentation or knowledge transfer of their advice for the client to follow
afterwards. This is really down to personal understanding of the words however
and may vary between industries. I don't think it matters too much, just call
yourself whatever you feel most appropriate.

In terms of taxes on the other hand you absolutely should get an accountant
and make sure you get it right. There is a big difference between running your
own LLC, being "self employed", and being a "sole trader", and the tax
requirements are totally different for each (and will vary by country).

As you've used the term 'LLC' I'm assuming your are US based so I can't offer
you any specific advice other than get a professional to help you. You should
be able to find lots of small business friendly accountants online who's fees
are low enough that they will save you significantly more than their fee by
making sure you do things correctly.

