Thanks for your question.
Yes, if you have a true business purpose, you could form an S-corporation but it does require a lot of filings. Before you do this, check with your payer and make sure they will pay you "corp to corp". In addition to the state requirements for forming a corporation, you'd have to apply for an employer ID# (EIN). Then, you would give a W-9 form with your EIN to the company you do work for and they would have to take out your SSN from their system since they will now be paying your corporation and not you personally. Once they do this, they will no longer be required to issue a 1099-Misc since you have incorporated your business into an S-Corporation.
You would still have to pay yourself a "reasonable salary" from your S-corp which would still be subject to self-employment (SE) tax. Any amounts over your salary, you can withdraw as dividends (not subject to SE tax). If you do not pay yourself a reasonable salary, this could trigger IRS scrutiny.
For more information on S-corporation filing requirements, see http://www.irs.gov/businesses/small/article/0,,id=98263,00.html and
If you wish also to have limited liability protection, you may also wish to consider forming an Limited Liability Company (LLC) first and then electing S-corp status for your LLC. It is always best to consult a qualified tax professional such as a CPA or tax attorney for help in selecting and forming the best business type for you.
Hope this helps,
Edited by JK_CPA on 6/2/2010 at 9:36 PM EST