When discussing profits, the difference between incorporation and LLC formation is dependent on goals of the business and shareholders. If you choose incorporation, profits are taxed differently.
As a C Corporation, the business files business taxes, but can offer tax benefits in certain situations. It’s especially good if you want to use profits to reinvest in the growth of the business.
In an S Corporation, double taxation doesn’t happen, rather the profits are passed through the shareholders (depending on how many shares you own) to claim on their personal taxes. Personal taxation, therefore, with an S Corporation, works much like in an LLC.
If you form an LLC, all profits are considered part of your personal income and will be taxed accordingly, including social security and Medicare taxes deducted from your income, come tax time. There’s flexibility though with an LLC in how you or the members of the LLC choose to be taxed and viewed by the IRS. Still, the bottom line comes down to liability risk and how members want to deal with the formality of one over the other. Always consult a tax professional who can help steer you in the right direction.