What are pass-through businesses? Q.What are pass-through businesses? A.Most US businesses are not subject to the corporate income tax; rather, their profits flow through to owners or members and are taxed under the individual income tax. Pass-through businesses include sole proprietorships, partnerships, limited liability companies, and S-corporations. The share of business activity represented by pass-through entities has been rising for several decades. Read more about What are pass-through businesses?
How are pass-through businesses taxed? Q.How are pass-through businesses taxed? A.Pass-through businesses are not subject to an entity-level tax; instead, profits flow through to owners and are taxed under the individual income tax. Some pass-through income is eligible for a 20 percent deduction through 2025. Read more about How are pass-through businesses taxed?