Business partnerships and similar entities such as LLCs are “pass-through” entities for income tax purposes, meaning the partnership itself is not taxed, but rather, income to the partnership passes through to each partner who then pays his or her share of the tax.  Likewise, current partnerships are not subject to audit adjustments at the partnership level; instead, adjustments are assessed against individual partners.

This could all change after January 1, 2018. Click to find out how new federal law affects partnership taxes.