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Self-employment is the act of generating one's income directly from customers through working, clients or other organizations as opposed to being an employee of a business (or person).
Generally, tax authorities will view a person as self-employed if the person chooses to be recognized as such, or is generating income such that the person is required to file a tax return under legislation that subsists in the relevant jurisdiction(s). In the real world the critical issue for the taxing authorities is not that the person is trading but is whether the person is profitable and hence potentially taxable. In other words the activity of trading is likely to be ignored if no profit is present, so occasional and hobby- or enthusiast-based economic activity is generally ignored by authorities.
Self-employed people generally find their own work rather than being provided with work by an employer, earning income from a trade or business that they operate. In some countries governments (the United States and UK, for example) are placing more emphasis on clarifying whether an individual is self-employed or engaged in disguised employment, often described as the pretense of a contractual intra-business relationship to hide what is otherwise a simple employer-employee relationship.