Choosing the right business structure is essential for managing tax obligations effectively. Each entity type has unique tax implications that impact financial planning, liability, and overall business operations.
- Business income is reported on the owner's personal tax return
- Subject to self-employment taxes
- No corporate tax filings required
- Profits and losses pass through to individual partners
- Partners report income on personal tax returns
- Self-employment taxes apply to earnings
Limited Liability Company (LLC)
- Can choose pass-through taxation or corporate tax treatment
- Default taxation as a sole proprietorship (single-member) or partnership (multi-member)
- Option to elect corporate tax status for different financial benefits
- Subject to corporate income tax
- Potential for double taxation—profits taxed at the corporate level and again when distributed as dividends
- Allows for structured tax planning and deductions
Strategic Tax Planning
Selecting the right business structure helps optimize tax efficiency. Consulting a business attorney ensures compliance with tax regulations while aligning financial strategies with business goals.
For professional legal assistance in business structuring, Business Law Group provides expert guidance:
Contact Us Today:
Name: Business Law Group
Address: 4901 W 136th Street, Suite 220, Leawood, KS 66224
Phone: (913) 225-8215
Website: https://kcbusinesslawgroup.com/
