7 years ago I was given an opportunity much like yours. I had no idea how long it would last, but I prepared for it as though it could last a long time and as if it might grow (it's still going, but it's still just me).
I filed for incorporation and elected S-Corp status.
There is more paperwork, but the paperwork is very easy or easy to have done for you.
To incorporate, I paid $100 to an online company to file the paperwork for me (no lawyer needed, it's so easy). I could have done it myself, but I wanted the fancy stuff that came with it. (a leather binder with my stock certificates in it, and a corporate embosser which I have used exactly never.)
I use a payroll company and I pay about $80/month. They make a direct deposit to me once/month. They also transfer money to my 401K and manage the 401k relationship for me. Once a month, or maybe biweekly, they send my withholding taxes and forms to the appropriate filing agency and then send me a notice identifying what was paid and to whom. Once a quarter, they file all quarterly taxes. When there is a problem with filing (usually my state gets something wrong), the payroll company handles it (but I have to keep my thumb on them to make sure they follow up on my timeline). Well worth it in my opinion.
Yes, I keep my 401k through them too.
I also pay an accountant roughly $800/year to file both my corporate taxes and my personal taxes. You can do this cheaper.
Once a year, I sign a pre-filled copy of incorporation papers and mail them back to the state.
Once a year, I sign a pre-filled copy of a one-page Form 5500 because my 401k holdings have grown so fast!!!
DC has additional stupid rules for corporations, but my accountant does all of them. Maybe once per year they'll email me something and tell me to sign it and mail it in.
I incorporated in another state and then moved, so now I have to pay a $60 fee every year to a company in the original state to act as my "Agent" in that state. My Corporate papers get mailed to them once a year, and then they mail them to me. I'm seriously considering becoming a "corporate agent" someday because it's so unbelievably easy. But it's the price I pay for moving.
Other benefits of an S-Corp:
My tax savings amount to just medicare taxes on the portion that I don't count as income because I pay myself more than the SS limit in wages. (note, doing this then means I have to pay personal estimated taxes quarterly)
401k - I stash 53k each year since I've incorporated. 18K from me, and the rest from the company.
I pay 100% of my cell phone bill every month through my corp as business expense
As an S-Corp, I don't get to use the home office deduction, but I can deduct a percentage of every household utility that my home office uses (in the percent of floor space that my office occupies). So roughly 15% savings each month on home security Alarm monitoring, Heat/ A/C, Gas, electric, housecleaning. I think that's it.
I pay my health insurance premiums through the corp, but then I have to declare that as income. The net result is that I pay reduced taxes on that money, but it's not completely tax-free. There might be a better way to do this, but I haven't worked that out yet.
I take roughly half my billings as w-2 wages, with the remaining half, I expense as much as I legally can (above paragraphs + employer contribution to 401k), and the rest I pay to myself as dividends.
Those are all the pros / cons I can think of. 8 years ago, I thought I would just use the opportunity for as long as it lasted, but 8 years later, I cannot believe how much money I've been able to save (mostly through a much much higher income than I would have made as an employee). If I had known MMM all of those years, I could be retired now.
I'm not sure the LLC filing as S-corp existed 8 years ago, but if it had, I would probably go that route just to make things a little easier. But in truth, my S-Corp doesn't take much time because I pay other people to deal with all of the paperwork.