If you are "self-employed," you are running a business whether you realize it or not so you want to start treating it as one as soon as possible. There are expenses like filing fees and attorneys' fees associated with forming a business entity but I think the trade-off is worth it. In the United States and certain other countries, these entities help protect your personal assets from being taken to pay business financial liabilities.
Additionally, if you are successful at being "self-employed," you will likely want to form a business entity at some point and doing it earlier avoids the hassle of changing how you operate further down the line.
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