I've been freelancing for a bit over 4 years now, although (as of a week and a half ago) I'm no longer US-based. My US corp still exists, though, so...
- I set up shop as an S-corp, just about the time the LLC craze was getting started. Most folks seem to be going LLC these days, but I can't really say that I know the benefits or drawbacks in doing so.
- It does seem to be an easy thing, but I asked my accountant for a referral to a lawyer and he pointed me to a guy who was able to get me set up with all the paperwork done right for a total of about $300, IIRC.
- While in the US, I paid myself a salary of $24,000/year and took any extra money out of the company as profit distributions. Doing it this way meant that, although I still had to pay income tax on everything, I only had to pay social security and payroll taxes on the base salary amount.
- Yes, you can deduct all business-related expenses as, well, business-related expenses. Your accountant will know the details of what is and isn't allowed as well as how it should be recorded. (Note that, as already mentioned, deductions just mean that you don't have to pay taxes on that money. It doesn't make the deductible items free, but it is (effectively) a 30-40% discount, depending on your tax bracket.)
- No, you don't need an accountant. But you really, really do want one. It will make your life much easier and, if you get a good one, the money you spend on his services will be repaid many times over in savings on your taxes.