Hello! I need help with this problem. The first one is good, but the rest are wrong. Thank you for helping me. Problem 2-21 (LO. 1) Purple Company has $200,000 in net income for 2018 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,000 standard deduction for 2018. Purple Company is Kirsten's only source of income. Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations. Click here to access the 2018 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%. When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar. a. If Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $40,000 deduction for qualified business income ($200,000 × 20%). Kirsten's taxable income is$, and her after-tax income is $. Feedback b. Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten. Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%,15%,20%). For single taxpayers, the 0 percent rate applies to the first $38,600 of taxable income. Purple Corporation's after-tax income is $ and Kristen's after tax income is $. Feedback Incorrect c. Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000. Kirsten's after-tax income is$.
Hello! I need help with this problem. The first one is good, but the rest are wrong. Thank you for helping me.
Problem 2-21 (LO. 1)
Purple Company has $200,000 in net income for 2018 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,000 standard deduction for 2018. Purple Company is Kirsten's only source of income.
Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations.
Click here to access the 2018 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%.
When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar.
a. If Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $40,000 deduction for qualified business income ($200,000 × 20%). Kirsten's taxable income is
$, and her after-tax income is $.
b. Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten.
Note: Individual taxpayers received preferential treatment regarding the
Purple Corporation's after-tax income is $ and Kristen's after tax income is $.
c. Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000. Kirsten's after-tax income is
$.
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