The structure of a business—whether it is a sole proprietorship, partnership, LLC, or corporation—impacts how it is taxed. For instance: - Sole Proprietorship: The business income is reported on the owner's personal tax return. - Partnership: Income is passed through to the partners, who report it on their individual tax returns. - LLC: Can choose to be taxed as a sole proprietorship, partnership, or corporation. - Corporation: Income is taxed at the corporate level, and dividends are taxed again at the shareholder level.