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If you form your own "company" and run your freelance work through the company

You can't just form a "company". To get away from the W2 treatment by their current employers, they would need to form a corporation, or an LLC and elect to be taxed as a corporation.

Then their current employers would need to agree to pay their corporation for the services of the corporation's employees (our OP). And that is definitely NOT a slam dunk.

Finally, they'd have to be employees of the corporation and handle all of the associated payroll taxes and reporting. And prepare tax returns for the corporation as well as their personal returns. All of which likely entail the services of a tax professional. They may well be preparing their own returns now, but the additional complexities of this structure come with additional costs.

But if that can be made to work and the costs to do it aren't excessive, then their corporation could put a retirement plan in place. My guess is that a SEP or a 401k plan would be the most likely choices.

--Peter
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