One of the problems with incorporating in the middle of the year is that you have to do double tax forms – first you have to do a Schedule C Business Profits and Loss for your sole proprietorship and then you have to also do a corporate tax form for the part of the year you were incorporated. Incorporating has two big advantages – Liability protection and better tax treatment. As you know taxes are going up next year no matter what kind of deal the administration and the congress agree to, so setting up a corporation is one legal way to reduce them.
Why is this the best time of year. Set your corporation up now, open your corporate bank accounts and so on, and then wait until January 1 to start doing business through the corporation (or LLC) and then you have a full clean year to operate and your tax preparation charges will be a lot cheaper than doing it in the middle of the year.
The details are too long for a blog post, but I have a great free article on my free article page – Should I incorporate My Online Business. Click here to read the article.