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tax topics
Business Income

Many businesses are taxed as flow-through enterprises, which are not subject to the corporate income tax as are corporations taxed under subchapter C of the Internal Revenue Code (C corporations). Instead their shareholders or partners include their allocated share of profits in taxable income under the individual income tax. These include corporations organized under subchapter S of the Internal Revenue Code (S corporations), partnerships (including LLCs), and sole proprietorships.

Background Information

Briefing Book entries on Business Income:

Expiration of the Bush Tax Cuts: How would the president's plan affect businesses?

TPC Distribution Tables

Testimony and TPC Papers

Tax Policy and Small Business,” Donald Marron (Testimony before the U.S. House of Representatives Subcommittee on Select Revenue Measures, Committee on Ways and Means, March 3, 2011)

Tax Issues Related to Small Business Job Creation,” Eric Toder (Testimony before the Senate Committee on Finance, February 22, 2010)

Tax Reform and Taxation of Small Business,” Eric Toder (Testimony before the Senate Committee on Finance, June 5, 2008)

Does the Federal Income Tax Favor Small Business?,” Eric Toder (TPC paper presented at the National Tax Association Proceedings of the 100th Annual Conference, 2007; paper published January 30, 2008)

TaxVox Posts

See other posts about business income on TaxVox

Tax Facts

Further Reading

Knittel, Matthew, Susan Nelson, Jason DeBacker, John Kitchen, James Pearce, and Richard Prisinzano, "Methodology to Identify Small Businesses and Their Owners," OTA Technical Paper 4, August 2011.