| I really don't want to 2nd guess your CPA, but there are many tax advisers still advising clients to form an S Corporation. The debate is still raging out there, and it really depends on the facts and circumstances at the time of your meeting with your CPA.
He is right about S Corporation comment, in that they can save Self-employment taxes. But, the recent Bill by Charlie Rangel is going to put a stop to that, if the Bill becomes Law! You can refer to the several articles that I have posted on the S Corporation Link regarding Unreasonable Salaries. To some extent, the S/E Tax issue advantage is not going to be as attractive in the past, given the increased IRS scrunity in this area.
Regarding your questions;
1)"anyhow, if i changed to an LLC can i use the home-office for deduction?".
You can claim a home office deduction irrespective of an entity classification.
2)"when you say annual fee, does that mean 1 year from the date i form the corporation or during the tax year? for example, i formed mine in nov 18 2007. does that mean that i will pay $500 in april 2008 for nove 18, 2008?".
Yes, you will be subject to the annual minimum tax of $500 for tax year 2007, even if you did not engage in any trade or business. | 
