One of the most significant benefits of being a freelancer is that you get much of the preferential tax status of being a business owner! Business owners are offered significantly greater tax benefits than a standard W-2 employee.
There are two ways an “independent contractor” or “freelancer” can be in business. They can get paid as an unincorporated 1099 contractor or can incorporate themselves and get paid to their corporation.
This option is where you create a separate business entity for your freelance business activities. In layman's terms, this would be an entity that has a separate business name and has the “INC” or “LLC” designation at the end of it.
For a single or spousal owner business, this is what you’ll want to do in my opinion. You will want to create an “INC” (aka corporation) with an “S Corp” designation, or “LLC” (aka Limited Liability Company) with an “S Corp” designation.