@VolvoGirl has a primer with lots of links.
1. This is a legal question. LLCs offer some liability protection, but it depends on the state, and it's not ever perfect protection, although it can be substantial.
2. As either a sole proprietor or single member LLC, you file a tax return containing a schedule C. You report your gross income and deduct ordinary and necessary expenses. You pay income tax and self-employment tax on your net income after expenses. SE tax is the self-employed version of social security and medicare tax and is 15% because you are paying both the employee half and the employer half. Your net income also flows to your main form 1040 where it is combined with all your other income and your deductions and credits are applied.
@Mike9241 's comment about the SE tax is incomplete. If you have a "hobby", you must pay income tax on your income, but you don't pay SE tax and you can't deduct expenses. The difference between a hobby and a business is discussed here. https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...
If you fail to earn a profit 3 out of 5 years, the IRS will generally assume you are running a hobby and not a business, unless you can prove otherwise. (For example, a friend has a "home catering business" and used that as the reason to buy a very expense new oven and range, which they deducted as a business expense. But if the business doesn't show a profit, the IRS is going to take away the deduction for what turns out to be a personal expense disguised as a business expense.) I wouldn't worry about this for now. I'm sure you will be successful.
3. Keep good records. You may also have to make quarterly estimated tax payments based on your expected net income.
