Pass-through taxation is a tax system in which the profits or losses of a business entity, such as a partnership, limited liability company (LLC), or S corporation, are not taxed at the entity level. Instead, the income "passes through" to the individual owners, who report and pay taxes on their share of the business's income on their personal tax returns. This avoids double taxation, as the business itself is not subject to separate tax at the entity level.
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Benefits Of S Corporation Tax Treatment For Washington LLCs
If you’re looking for a tax-related conversation piece for your next cocktail hour, look no further than this entry on the benefits of electing S corporation tax treatment.
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Post Categories
- Corporate Governance
The Phantom Income Problem
Phantom income is income that a business owner has to pay taxes on despite not having received any cash to pay the tax from the business. It’s not great. But it’s avoidable.
