Sounds like a real mess. Is there a service that takes care of all these problems automagically? I feel I'm very inexperienced to be able to handle all the tax/expense pitfalls (I'm not familiar with the US tax system).

Or at least a resource that describes everything that is needed from start to finish? For example the book Venture Deals (by Brad Feld) describes the basics of venture funding, but is there any practical guide for incorporating?

I'm very reluctant to incorporate because I don't know if I will be able to handle all the bureaucratic mess and keep up with everything (time and cost wise).

Really liked the 'army of 1' phrase, I'm in the same situation.