If you have a business, you can write off your legitimate business expenses. This happens whether you operate as a sole propriatorship, an LLC, or a corporation. The benifit of having an LLC or a Corporation is that it limits your liability to your business assets. Basically, if you operate as a sole proprietorship and someone sues you, all of your assets (house, car, investments, etc) are fair game. If you are a corporation or LLC, only the business assets are considered.



A few other things to consider:

1)The IRS has specific criteria to determine if you are operating as a business or as a hobby, and the tax rules are significanly different depending on which category you fall into. Being incorporated will not automatically make the IRS consider you a business instead of a hobby.

2)Rules and requirements for Corporations and LLCs vary somewhat by state. Your best bet would be to sit down with an experienced TAX accountant (not a bookkeeper), Tax Attorney, or IRS Enrolled Agent in your state. They will be able to give you advice specific to your situation.

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