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Advantages of Incorporating?

Advantages of Incorporating business!
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Erie Akert   wrote on : Wed May 05th,2010   Back to Article

I have a Sole Proprietorship currently and have been urged to change it to a C Corp. I was told that the tax deductions would be better. I've been in business for 5 years and am starting to make a profit. Which is good for my pocketbook, but isn't so good for my tax liability. I also have a full time job where my employer provides insurance for myself and my family. If I Incorporate I would quit my full time job and work as a subcontractor thus making myself responsible for everything. I would also then have to have a partner/employee. I am eager to grow my business and am concerned if this is the correct next step. Any advice will be accepted.

Reply :

If you are just changing your structure to reduce your tax cap then I do not think it is a good idea. If your concern is protection then yes its a good idea. Because as a sole proprietor you are paying taxes on personal level only. If you create a c corporation then you will pay taxes twice on the same income. First on the corporate level then on personal level.

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