The Congressional Research Service (CRS) of the US Library of Congress has released a report to provide an overview of the general tax treatment of corporate and pass-through businesses. The CRS report is entitled "A Brief Overview of Business Types and Their Tax Treatment."
The income of subchapter C corporations, also known as regular corporations, is taxed once at the corporate level according to the corporate tax system, and then a second time at the individual shareholder level according to the individual tax rates when dividends are paid or capital gains are recognized.
Businesses that choose any other form of organization are, in general, not subject to the corporate income tax. Instead, the income of such businesses passes through to their owners and is taxed according to the individual income tax rates. Such pass-through businesses include sole proprietorships, partnerships, subchapter S corporations, and limited liability companies (LLCs).
The CRS report is dated 9 December 2020 and is designated R43104 (Version 8).
Note: The CRS is an agency within the US Library of Congress and serves the US Congress throughout the legislative process by providing legislative research and analysis for an informed national legislature.