The Flow-Through Model also applies to a sole proprietorship.

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The Flow-Through Model, also known as pass-through taxation, applies to all business entities, including sole proprietorships, partnerships, limited liability companies (LLCs), and S corporations. In pass-through taxation, the profits and losses of the business are passed directly to the owners and are reported on their personal tax returns. This means that the business itself does not pay taxes on its profits, but rather the owners are responsible for paying taxes on their individual share of the profits.

The Flow-Through Model Also Applies to a Sole Proprietorship