I think that the mention above of expenses and writeoffs is the point of determination which may or may not be the decision point for your interest in a full blown incorporated business. There are expenses, and requirements, both front end and back end to an incorporated business, that may or may not overide your percieved value in writeoff's. An accountant should be able to clue you in here. Certainly a true C corp has it pluses (writeoff's) and minuses both in required paperwork as well as a double taxation. LLC's and Sub S's have their own pluses and minuses. The other important point is sales taxes, and believe me that this can put the screws to you pretty fast if you do not keep up with it. I bought a book from Barnes and Noble on the different forms of corporations and requirements, and would not now incorporate unless absoutely necessary; I just don't want all the extra bs that goes with it. Make sure you read your State's online information concerning corporations and talk to a good accountant. My mention of perhaps a sole proprietership was not in respect to taking writeoffs, but just in appearing legitimate. But if you have a good accountant, and he or she knows their business, I would not worry about audits. That's what acountants are for. The most that could happen is that some writeoff's will not be allowed and, if your account doesn't know, you know what, a fine.