In addition, many of the retirement and other benefit plans previously available only to corporate entities were extended on similar terms to partnerships and sole proprietorships. In other words, we now have substantial parity among the entities when it comes to choosing tax deductible fringe benefits. Moreover, corporate tax rates were raised above some individual marginal tax rate brackets. In essence, Congress neutralized the tax reasons for incorporating. Apart from tax considerations and the desire to limit liability, there are several reasons for incorporating.
Appearance is one reason.
Another reason for incorporating is the protection of the entity purchasing the services. Let's say, your corporation regularly retains a number of free-lance computer programmers as independent contractors. To lessen this exposure, some companies now require that self-employed individuals incorporate before services are performed. While designed to be accurate, this publication is not intended to constitute the rendering of legal, accounting, or other professional services or to serve as a substitute for such services.