Sole proprietorships, partnerships, and LLCs pay income taxes in the same way as pass-through entities, so paying more or less tax depends on the individual owner’s tax situation. The total tax paid by all these business owners is based on their total income from all sources, not their business incomes alone. A partnership doesn’t pay taxes, but it files an information return with the IRS. The partners receive a Schedule K-1 showing their share of the partnership income. Single-member LLCs generally pay income taxes as sole proprietorships, and multiple-member LLCs generally pay taxes as partnerships.