I'm looking into starting a formal business, and need a little help. I currently go to a public university and have a scholarship that is based on the fact that I, personally, don't claim more than the national poverty level ($11K-ish). Recently I have started to make more money and need to file for a business license that would allow me to make money, but not necessarily withdraw it from the business account, therefor not "claiming" it. LLC seems the most appealing, it will allow me to grow, is non-liable, etc. HOWEVER, it appears to be "pass-through." Does anyone have any recommendations/info on whether a LLC is a good option for me? Am I able to set it up non-pass-through? So the company itself is taxed, and members (me) are only taxed on what they claim and pay themselves? Any help would be appreciated!
An LLC can be taxed like a corporation. By default an LLC is a pass-through entity, but if you file Form 8832 with the IRS, you can change your LLC from pass-through taxation to corporate taxation.
I can't speak on the legalities of it in connection with your scholariship, so you are best served talking to a tax attorney, but yes you can structure your LLC to be taxed like a corporation. With corporate taxation you will only be taxed on the amount of money you take out of the business, not the entire amount. The corporation or LLC will pay taxes on the rest.
Your best bet would be to form a Corporation. That way, you can hold the assets in the corporation and have no income but still have stock in it. You will have to pay corporate taxes on that income but that might make more sense.
An LLC will have to pass through any profit/loss to the share holders, even if you don't draw any salary EDIT: unless you do what Zuly's answer says.