If the net income on your Schedule C business will increase, or continue to be over $50,000, consider incorporating. Incorporation can significantly reduce your self-employment taxes. Further, it can limit your legal liability as an owner. It can also reduce your chances of an IRS audit. Schedule C's are audited more often than S corporations. Please contact us to discuss this matter further. Note: The tax benefit of incorporating your sole proprietorship is from the savings of self-employment taxes. The greater the difference between a reasonable salary and the remaining profit the more tax benefit of being an S corporation.