if your rate and other circumstances allow. You can also reduce the SE tax if you file a form to be recognized as an S-corp for Federal tax purposes. However, then you need a payroll processor of some sort and it is more time and labor-intensive.

CON: Lots of extra 'administrative' work like invoicing, book keeping, additional taxes, and potentially some 401k forms. Additional expenses include SE tax, payroll processing, accountant fees if you do your own taxes now, liability and workers comp insurance, etc.

ADVICE: Put away a portion of every check and leave it in a savings account for months when you may or may not have enough billable hours. I try to keep a full 6 months of living expenses in the bank in case things dry up. I have had the same client for 6 years but there have still been a couple of months when circumstances dictated that I take a couple of weeks off. Nice to not have to panic when that happens.

If you are willing to work a little harder, plan a little more, and take a risk, it is definitely worth it. LOVE not having a boss!