Final answer:
Sole proprietorships are taxed as self-employed individuals, while corporations are subject to corporate income tax.
Step-by-step explanation:
In terms of taxation, sole proprietorships and corporations differ in several ways. Sole proprietorships are taxed as self-employed individuals, meaning that the business profits and losses are reported on the owner's personal tax return. The owner is responsible for paying both income tax and self-employment taxes on their share of the profits.
Corporations, on the other hand, are considered separate legal entities and are subject to corporate income tax. The corporation must file its own tax return and pay taxes on its profits. Shareholders of the corporation may also be subject to taxes on dividends received from the corporation.