>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.


I formed a LLC with my wife as a 50% partner. My understanding is that it takes more than one to form a corporation, so we set it up that way. I pay her to do the books, run errands, take calls, etc. I also pay my kids every two weeks for similar tasks, but they never see the money. It goes into their college fund and also serves to reduce my income. My 9 year old son actually helps me build computers, run cabling, etc. My 13 and 18 year old daughters keeps my office clean, answers the phone, cleans the car etc. so they are doing legitimate work. Point is you can use your family members in the business and also reduce your TAXABLE income while funding other things.