when it comes to the big advantage of a pass through entity we have two words for you tax treatment 
regular incorporated businesses pay a flat corporate income tax on any profits before they distribute those earnings to stockholders and owners these shareholders must report their dividends or other distributions on their personal tax returns so the same dollars effectively get taxed twice a pass through entity allows profits to avoid this double taxation specifically the initial corporate tax round a pass through is exempt from business taxes it passes earnings straight through to stakeholders who do owe taxes on it but the money is only taxed once a pass through entity also affords owners and investors an extra deduction on their personal taxes in some cases if the business suffers a loss that also gets passed through and can be used to reduce overall taxable income 