Many Pass-Through Businesses Face Marginal Rates Close to 50%

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According to data from the Tax Foundation, pass-through businesses (sole proprietorships, S corporations, and partnerships) make up a majority of businesses across the United States.  As many real estate investors know, owners must pay individual income tax on income earned from these businesses.  The Tax Foundation took a look at the marginal tax rates for the whole country to illustrate that many pass-through businesses face marginal tax rates close to 50%.  Indeed…

“In 2018, pass-through firms made up over half of nearly every state’s private sector employment. The share of private sector employment provided by pass-through firms ranges from 49.7 percent in Hawaii to 72.5 percent in Montana.”

Click here to read the full report at the Tax Foundation.

 

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Director of Education & Outreach, National Real Estate Investors Association

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