Business Partnership Tax Attorney Chicago
A partnership is a pass-through entity, such a subchapter S Corporation. This business entity is between at least two individual partners, each of whom are required to pay any income tax on his or her personal tax return. This amount is based on the partnership share, which is determined by the original partnership agreement or partnership law.
Business Partner Types
Throughout the year, partners must pay both estimated income taxes and self-employment taxes. Partners also must pay taxes on their share of income, even if the partnership doesn’t distribute any. Your partnership may be classified under the following categories:
- General Partnerships: Where two or more partners share in the profits and the debt equally, or in certain percentages that are commonly decided upon in the agreement document.
- Limited Partnerships: Where there’s at least one general partner and at least one limited partner. A limited partner shares partially in the profits, and their losses are limited to the extent of their investment.
- Limited Liability Partnerships: This is much like a general partnership, but a partner doesn’t take personal liability for the negligence of another partner. An LLP is a common professional arrangement.
- Limited Liability Limited Partnerships: This type of business arrangement may shield partners to other certain liabilities or obligations from the LLLC.
- Family Limited Partnerships: These business arrangements may consist of general and limited partners alike, and are often used to transfer wealth through multiple familial generations.
Illinois Tax Law Guidelines
LLCs with two or more members are also taxed as partnerships, unless they’ve elected to be taxed as S corporations. Your Houston partnership tax attorney can clear up much of the confusion regarding these matters.
Because it is easier to dissolve than most other business entities, partnerships are also often used as vehicles for investment. If you’re a skilled tradesperson or business person, you may also favor a professional limited liability partnership.
Chicago Partnership Tax Lawyer
The laws and regulations surrounding partnership tax law may seem simple at first, but there are more than enough loopholes and nuances to make consulting with a Chicago partnership tax lawyer worth your while.
Partnership Tax Attorney Chicago