There is a benefit to setting up an LLC. An LLC is considered a “pass through taxation” for both single and multi-members.
In a single owner situation, the IRS indicates that income and capital pass through directly to the owner. In the end, you would only have to pay taxes as an individual and not a business. Meanwhile, you would still be privy to all the liability protection that comes along with establishing as an LLC.
However, if you are not the only member, then the IRS usually handles taxation as they would in a partnership scenario. You would have to file a tax return for the LLC, but the LLC doesn’t pay the tax itself. In that event, each member is responsible for filing proper tax forms on their individual tax returns. It’s pretty much the same scenario, but complicated a bit by the fact that each member is responsible for filing the appropriate documents.
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