What are the Different Business Structures and Their Tax Implications?
1. Sole Proprietorship: Income is reported on the individual's personal tax return, and they pay self-employment taxes. 2. Partnership: Income is passed through to the partners, who report it on their personal tax returns. 3. Corporation: A separate legal entity that files its own tax returns and pays corporate taxes. 4. Limited Liability Company (LLC): Can choose to be taxed as a sole proprietorship, partnership, or corporation.