understanding tax obligations

How Does Business Structure Affect Tax Obligations?

The structure of a business significantly impacts its tax obligations. For instance:
Sole Proprietorship: The simplest structure, where 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 personal tax returns.
Corporation: A separate legal entity that pays corporate taxes on its profits.
Limited Liability Company (LLC): Can be taxed as a sole proprietorship, partnership, or corporation, depending on its election.

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