Your business legal form will determine how it is treated for tax purposes. A business entity can be taxed as a separate entity or the business profits and losses can be passed through to the owners, who include these amounts on their individual tax returns.
Sole proprietorships, S Corps, LLC’s are always pass-through entities. One -Owner LLC’s are taxed like sole proprietorships. However, LLC’s and Partnership owners have the option of choosing to have their entity taxed a C corporation(separate enitity) or an S Corp by filing an election with the IRS.
A pass-through entity does not pay tax itself. Instead, the business profits or losses are passed through to its owners, who include them on their personal tax return
If a profit is passed through to the owner, the owner must add that money to any income from other sources and pay tax on the total amount. If a loss is passed through, the owner can generally use it to offset income from other sources- for example, salary from a job etc to reduce the total amount of income subject to tax.
Is the IRS currently garnishing your wages or levied your bank account? Do you have problems repaying your back-taxes? Do you have several years of un-filed tax returns or do you need IRS Audit Representation? We Can Help! We Represent Taxpayers Nationwide...
Free Consultation (713)300-3965 or contact us via web www.advancetaxrelief.net.
ADVANCE TAX RELIEF LLC (ATR) - "WE SOLVE TAX PROBLEMS"
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