Hello SandyMD,
1. For a Sole proprietor/self employed, you will pay ordinary income tax and also self employment tax of 15% on top of it. You will get credit for one half of the self employment from your total income.
2. If you do an S corp election, you will only pay the ordinary income tax on the amount. So you will save some tax dollars on the SE taxes. Although, keep in mind that depending on the income you derive from the business, you will have to do paroll and pay payroll taxes in an S corp. Also, take into account the S corp tax preparation fees as well. You really have to see how much you will save from doing an S corp. If the income is significant, then it would make sense to elect as an S corporation.
Hope that clarifies your question.
Thank you!