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Perks of Becoming an Inc. Contractor

As a contractor, one of the most important decisions you can make is how to structure your business. While many options are available, incorporating your business can provide significant benefits to help you succeed and grow. This blog post will explore the key benefits of being incorporated as a contractor and why you should consider this option for your business.

Liability Protection

One of the most significant benefits of being incorporated is its liability protection. When you incorporate your business, you create a separate legal entity that is distinct from your personal assets. This means that if your business is sued or incurs debt, your personal assets, such as your home and savings, will not be at risk. This is particularly important for contractors, who often work with dangerous equipment and face the risk of accidents on the job. Incorporating your business as a limited liability company (LLC) or corporation can provide peace of mind and help you sleep easier at night, knowing that your personal assets are protected.

Tax Benefits

Incorporating your business can also provide tax benefits. For example, as a corporation, you may be eligible to be taxed as a pass-through entity, which means that the business's income will be taxed at the individual tax rate of the owner(s) instead of being subject to double taxation. Additionally, incorporated businesses can deduct business expenses, such as equipment and supplies, from their taxable income, which can result in a lower tax bill. Finally, incorporating your business can also make it easier to plan for and manage your tax obligations, as you will have a clear separation between your personal and business finances.

Professionalism and Credibility

Incorporating your business can also improve its image and credibility in the eyes of clients, suppliers, and other business partners. An incorporated business gives the impression of stability and professionalism, making it easier to attract new clients and establish long-term business relationships. Furthermore, incorporating your business can increase your credibility with lenders and investors, making it easier to obtain loans and other forms of financing for growth and expansion.

Separation of Personal and Business Finances

Another benefit of incorporating your business is the ability to separate your personal and business finances. This can make record-keeping and tax preparation much simpler and less time-consuming. Additionally, having a clear separation between your personal and business finances can make it easier to manage your cash flow and budget and ensure that you are using your business funds for business purposes only.


There are many benefits to being incorporated as a contractor, including liability protection, tax benefits, professionalism and credibility, and separation of personal and business finances. While there may also be some drawbacks, such as increased administrative and legal responsibilities and higher costs compared to operating as a sole proprietor or partnership, the benefits of incorporation often outweigh these potential downsides.

Ultimately, the decision to incorporate your business should be based on your unique circumstances and goals. Consider consulting with a professional, such as an accountant or attorney, to determine if incorporation is the right choice for your business. Whether you are just starting or looking to grow and expand your existing business, incorporating can help you achieve your goals and secure your financial future.