Tax Reform: Examining the Taxation of Business Entities | The United States Senate Committee on Finance
Tax Reform: Examining the Taxation of Business Entities | The United States Senate Committee on Finance
Aug 1, 2012
senate.gov
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One of the most misunderstood concepts in business taxation is this: Most businesses do not pay federal income tax at the entity level. If your business is structured as a sole proprietorship, LLC, or S Corporation, it is typically considered a pass-through entity. This means the business itself does not pay federal income tax. Instead, the net profit flows through to the owner’s personal tax return, and the owner is responsible for paying the tax. Here is what each structure actually files: Sol
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