While you can incorporate in any U.S. state you wish -- there is no legal requirement that says you have to incorporate in the state where you live and work -- the rule-of-thumb is to incorporate in the state that your company has its principal operations, especially if your business is primarily within a single state. However, there may be good reasons not to incorporate in your home state (e.g., other states have more flexible corporation laws, more tax benefits, or no corporate income tax).
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