I wrote an article about this in our July, 2005 newsletter available at http://www.mdtaxes.com/news0705.html.

Unless you are going to earn hundreds of thousands of dollars moonlighting, I don't see how incorporating (and electing S-Corp status) will save you any money. If anything, incorporating will cost more in fees and payroll taxes then you can possibly save by cutting your income tax bill.

Remember, everything that is deductible to a corporation is also deductible to a sole proprietor. Plus, certain expenses such as the home office deduction and claiming your vehicle are easier for unincorporated businesses to claim.

Please take a few minutes to read my article and let me know if you have other questions about the advantages and disadvantages of incorporating.

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