That said, don’t fool yourself into thinking you’ll reap any major tax benefits from incorporating, says Robert Caplan, a certified public accountant in Foster City, Calif. Tax liabilities for corporations are generally the same, and sometimes even much higher, than those of a sole proprietor or partnership. “I hear people all the time talk about tax benefits of incorporating, but they’re just not there,” Mr. Caplan says.A compelling reason to incorporate, however, is the protection of personal assets that comes with it. If someone trips over a garden hose on one of your properties and sues, or the business falls into massive debt, your personal assets would be protected in court — as long as you can prove you’re upholding the numerous extra responsibilities and recordkeeping that come with being a corporation.
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