[tfehring]

The tax benefits come from electing to be treated as an S corp for tax purposes, not from establishing an LLC per se. But as far as I'm aware, you need to establish an LLC or other corporate entity in order to be taxed as an S corp.

It's true that creditors can come after your personal assets if you personally guarantee a corporate entity's debt. But establishing an LLC does limit your personal liability in any instance where you don't provide a personal guarantee. I suspect that many individual freelancers who establish LLCs never take on debt or other liabilities that require personal guarantees.