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Self-Employed
2 MIN READ
UPDATED APRIL 2026

You work for yourself.

READ2 min · UPDATED
Reviewed against primary sources cited at the bottom of this page.

Self-employment changes taxes, retirement accounts, health insurance, and cash flowcash flowMoney coming in minus money going out over a month or year. A positive number means you earn more than you spend; negative means the opposite.Full definition management completely. The standard W-2 advice does not apply, and the gap costs more than most people realize.

This page covers personal finance fundamentals that apply regardless of your view on Bitcoin or fiat currencyfiat currencyMoney declared legal tender by a government, not backed by a physical commodity. Its value rests on trust in the issuing government.Full definition.

This page covers US-specific accounts and tax law. Outside the US? Self-employment requires equivalent attention to local payroll-tax structures, retirement vehicles, and health-care decisions.
THE SHORT VERSION

Being self-employed means you pay both sides of Social Security and Medicare, 15.3% before income tax even starts. There's no 401k match. Health insurance comes out of pocket. Income arrives in lumps. None of this is a reason to avoid self-employment, but it requires a completely different financial system than the W-2 world. This page maps it.

Start here

1 · THE FRAMEWORK
Gig worker and freelancer finance
Quarterly estimated taxes, 1099 reporting, deductible expenses, and the difference between gross billed and what's actually yours.
2 · THE STRUCTURE
LLC vs S-Corp
When the S-Corp election actually saves money. The break-even is around $60K net income; below that the paperwork costs more than the tax saved.
3 · THE BIG ACCOUNT
Solo 401(k)
Up to $72,000 per year in tax-deferred savings. The single biggest tax-shelter advantage of being self-employed.

Your most important tools

Tax Estimator
Model your quarterly estimated tax payment so April isn't a surprise.
Savings Rate to FI
Self-employed FIRE starts with knowing your actual savings rate net of self-employment tax.
Roth Conversion Sweet Spot
In low-income years between gigs: convert to Roth at the lowest rate you'll ever pay.

Common questions

How do I handle quarterly estimated taxes?

Set aside 25-30% of every payment received immediately. Pay quarterly by April 15, June 15, September 15, January 15. Use a separate account so the money doesn't sit in checking. Gig worker finance →

Should I form an LLC or S-Corp?

Under approximately $60,000 net income: LLC as sole proprietor. Above that: S-Corp election can save meaningful self-employment taxself-employment taxThe 15.3% tax self-employed people pay on business income to cover both the employee and employer share of Social Security and Medicare.Full definition. The transition has overhead. LLC vs S-Corp math →

Where do I put retirement savings?

Solo 401(k) first. Up to $72,000 per year in 2026 between employee and employer contributions. Solo 401(k) explainer →

How do I get health insurance?

ACA marketplace. Premiums are 100% deductible above the line for self-employed people. Pair with a high-deductible plan and an HSAHealth Savings Account (HSA)A tax-advantaged account for healthcare costs, available with a high-deductible plan; contributions, growth, and qualified withdrawals are all tax-free.Full definition for the maximum tax efficiency. Health insurance →

How do I budget on irregular income?

Pay yourself a fixed "salary" from a business account into your personal account. Let the business buffer absorb variability so personal cash flow stays steady. Cash flow system →

Reading path

  1. Gig worker finance
  2. LLC vs S-Corp
  3. Solo 401(k)
  4. Health insurance
  5. HSA
  6. Bitcoin taxes · self-employment + Bitcoin creates specific scenarios
  7. State domicile · high earners saving toward a liquidity eventliquidity eventThe moment when shares of a private company can finally be sold for cash. Usually triggered when the company gets bought out, or when it lists on a stock exchange so the public can buy its shares.

Last updated 2026-04-30. Not financial advice. Do your own research.

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