Assuming USA works the same as Canada:

A corporation's income is taxed at about half of an individual's. Then, if and when you take that income from the corporation, you are taxed at about half of your normal rate (I believe this is a dividend income as opposed to a salary income). So, if you have an excess of income that you wish to keep within the corporation, you keep more cash and therefore have more to invest or do whatever you do with your money. More to invest means a greater gain (assuming a gain). This is like the RRSP idea. Or course, when a corporation invests, certain rules kick-in. You corporation status can change. Foreign investments can change things too.

Corporations are more complicated, but they have advantages. In some situations, these advantages out-weigh the extra costs invloved.

Joe


>For most of the past 15 years I've been a self employed consultant working on various programming assignments. I am not incorporated but I am starting to think I should be, especially now that all of my income for 1999 will probably come from only 1 client instead of the usual 3 or 4. The problem, of-course, is that having income from only 1 client may be construed as an employer/employee relationship by the IRS.
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>Should I incorporate or should I ask my client to bring me on as an employee? Are corporate taxes higher than personal taxes? Does incorporating even help at all with this issue?
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>I realize these are questions for a tax accountant but I'm curious as to what other self employed developers know about this.