Pass-Through Entity Explained. Is It the Right Structure for You?

In this ACap ReCap episode we explain what are pass-through entities, their types, the advantages and disadvantages of pass-through entities, and whether or not this is the right business structure for you.

0:00 Intro
0:17 What is Pass-Through Entity
1:38 Types of Pass-Through Entities
4:17 Advantages of Pass-Through Entities
6:22 Disadvantages of Pass-Through Entities
9:18 Closing Thoughts

A pass-through entity is a business structure in which profits and losses “pass through” the business directly to the owners’ personal income tax returns. In other words, the business itself does not pay federal income tax. Instead, the tax responsibility lies with the individual owner(s), who report the entity’s income on their personal tax filings and are taxed at their individual income tax rate.

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DISCLAIMER: This video is for informational purposes only and should not be construed as tax, financial, or legal advice. Every person’s situation is different, and you should consult with your own financial and tax advisor for advice specific to your situation. Comments are not reviewed.