How is your business structured? There are numerous factors involved in choosing a particular form of business ownership—for instance, you might opt for a traditional C corporation format for the protection it provides from personal liability—but taxes remain a key part of the equation. Here's a brief summary of the tax consequences for the five main types of business entities:

1. C Corporations: While a C corporation acts as a shield from personal liability, this option results in "double taxation." First, your business is taxed at the corporate level—and then you may be taxed again on your salary, bonuses, and dividends paid by the company. Second, you pay tax again when salary and dividends are paid out to you.

2. Partnerships: These entities avoid double taxation issues. Although partnership income is reported on a separate return, income and deductions are passed through to the partners. As a partner, income is taxable to you only under the individual tax rate structure. However, a general partner may be personally liable to creditors.

3. S Corporations: Business owners who opt for the S corporation form of ownership get the same tax benefits as partners plus protection of personal assets. Income and deductions reported on the business tax return are passed through to individual shareholders. There's no double taxation. However, while growth in S corporations had mushroomed the past few decades, it slowed after the top individual tax rate was raised to 39.6%, higher than the top corporate rate of 35%. A calendar-year C corporation has until March 15, 2016, to switch to S corporation status for the 2016 tax year.

4. Limited liability companies (LLCs): Another reason why growth in S corporations has slowed is the advent of LLCs. By filing the documents required by state law, LLC shareholders (called "members") are generally taxed like partnerships for federal income tax purposes, unless they elect otherwise. LLCs thus are known for combining single taxation on the individual level with protection of personal assets. Keep in mind, however, that the rules differ among states, so some LLCs might not be treated like partnerships for state income tax purposes.

5. Sole proprietorships: This is the simplest form of business ownership. Essentially, the business and the owner are one and the same. You generally report your business income on Schedule C of your individual tax return.

Of course, you must weigh other factors affecting business ownership before you decide which route to take. Just give taxes their proper due.