[Don Plumley]

For a single person company (i.e. a 1099 contractor), the benefit of an LLC is the personal liability protection (the benefits of a corporation) but pass-through taxation at the lower personal rate (like a partnership). The downside is a little bit of paperwork, and here in CA, a $800 a year minimum fee. As Erik said, there's no advantage in terms of ability to claim business expenses as a sole proprietor versus an LLC or C-Corp.

As a principal in any organization, you should not have to pay workman's comp - here in CA at least as far as I know.

If you work for a corporation (C Corp, your own or someone else), if you are paid a salary, the corporation has to pay the employer portion of the tax - there is no free lunch. The downside of the corporation is any profits are taxed at the higher corporate rate.

Erik - can you (or another CPA on the board) help explain how forming your own corporation can reduce your individual income tax while maintaining or increasing your net individual income? This isn't clear to me.

Thanks!