ahing business as a sole proprietorship. She oversees a team of 10 cleaning personnel, markets th siness, and provides supplies and equipment. The business has been generating net taxable profits of $73,000 per year, bem nsidering the QBI deduction. As a sole proprietor, Megan qualifies for the 20 percent deduction, reducing taxable income fre siness to $58,400. equired: Assume that Megan's marginal tax rate on ordinary income is 35 percent and that she has no pressing need for cash flow from siness. Should Megan consider incorporating and operating the business through a C corporation? Assume that C Corporation bject to a 21% tax rate. Fill the below table to justify your answers. (Ignore any payroll or self-employment tax considerations.) Answer is complete and correct. moome tax liability if operated as a C corporation income tax savings Should Megan consider incorporating and operating the business through a C corporation? $ 15,330 $ 5,110 Yos per year
ahing business as a sole proprietorship. She oversees a team of 10 cleaning personnel, markets th siness, and provides supplies and equipment. The business has been generating net taxable profits of $73,000 per year, bem nsidering the QBI deduction. As a sole proprietor, Megan qualifies for the 20 percent deduction, reducing taxable income fre siness to $58,400. equired: Assume that Megan's marginal tax rate on ordinary income is 35 percent and that she has no pressing need for cash flow from siness. Should Megan consider incorporating and operating the business through a C corporation? Assume that C Corporation bject to a 21% tax rate. Fill the below table to justify your answers. (Ignore any payroll or self-employment tax considerations.) Answer is complete and correct. moome tax liability if operated as a C corporation income tax savings Should Megan consider incorporating and operating the business through a C corporation? $ 15,330 $ 5,110 Yos per year
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
Problem 47P
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT