As long as you are running your business properly, keeping good records, paying your taxes, and obeying the law, there is absolutely no good reason why a lawsuit or anything could penetrate the corporate shield. You cannot use a corporation for personal affairs or mere tax deductions. This is what can get you in trouble. However, I can tell you from experience that when you are in business, it is not a matter of IF you will be sued, but when. If you are not incorporated, you are exposing everything to loss through a lawsuit.

I don't understand why anyone would think you would have to pay more tax as a corporation as well. If run properly, doing business through a corporation means you pay the LOWEST taxes of all. Now, if you are trying to run your personal income aside from business through a corporation, that is a different story. However, I can tell you from experience that my taxes went way down (legally) after doing business through a corporation and taking advantage of all the legal tax deductions that come with it.

One of the great things about taxes and corporations is that they get to pay taxes on the money they make AFTER expenses. This means that every expense related to business can be paid out of money that is usually taxed BEFORE it is spent for an individual. This leads to even greater tax savings.

For anyone to advise against incoporating when in business is a sure sign that they do not understand business or do not understand how to properly use the protection given by the government. There are a ton of legal and tax advantages to doing business through a corporation. Don't overpay your taxes and don't expose your own possessions to loss. Make SURE you incoporate if you intend to be in ANY business!

Matt Bowman

Related link: www.REItoolbox.com