The strange thing about the LLC as a business entity is the IRS doesn't recognize it. So every LLC is actually taxed as a sole-proprietor, partnership or corporation. The good (and bad) news is you have to choose which it will be.
Regardless of how your LLC is treated for tax purposes, it retains its legal status as an LLC.
If you telecommute for an out of state employer you may want to take a look at this article.
The US Supreme Court let stand a New York district tax court ruling in which an employee of a New York employer was liable for New York state income tax on 100% of his earning even though 75% of the work was done in Tennessee.
It turns out the employee was telecommuting for his own convenience and not that of the employer. As a result he'll have a pretty hefty tax bill to content with.
This article offers some pretty good advice: "If you telecommute or employ telecommuters, consider reviewing the language in your employment contracts. Where appropriate, the contract should clearly state when telecommuting is required by the employer as a condition of employment."
Pretty much as long has there have been outside consultants, they have been asking this question: W-2? 1099? or Corp-to-Corp?
For the unintiated, any new consultant needs to determine how they will organize their business. And these are the usual options people talk about. You would think it's a pretty straight forward calculation, but it can really become quite complicated.
I made a new posting, Consultants: W-2, 1099 or Corp-to-Corp?, that goes into some detail about the issues you need to consider. Each option has its own advantages and drawbacks. As with most things, it's all about the trade-offs.