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For flow-through entities with individual owners, how many times is flow-through entity income taxed, who pays...

For flow-through entities with individual owners, how many times is flow-through entity income taxed, who pays the tax, and what is the tax rate?

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Answer #1

As per the US Laws, Flow Through Entity are taxed only once through K-1 Statement.

The income generated by a flow-through entity is treated as income of the investors or owners. This means that taxation passes through to the tax return of owners.

The average entity tax rate, as a combination of federal and California state tax rates, is 31.9%. That rate, combined with individual income tax rates, makes the tax rate for c-corporation owners around 10% higher than owners of flow-through entities.

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