TABLE 3.6 Personal tax rates, 2022. Taxable Income ($)Single Taxpayers Married Taxpayers Filing Joint ReturnsTax Rate(%) 0-9,950 0-19, 900 10 % 9,950-40, 525 19,900-81,and above 628, 300 and above 37% \\\ You have set upyour tax preparation firm as an incorporated business.You took $80,000 from the firm as your salary. Thefirm's taxable income for the year (net of your salary)was $30,000. Assume you pay personal taxes as anunmarried taxpayer. Use the tax rates presented inTable 3.6. How much tax must be paid to the federalgovernment, including both your personal taxes andthe firm's taxes? By how much will you reduce the totaltax bill if you cut your salary to $50,000, thereby leavingthe firm with taxable income of $60,000? Whatallocation will minimize the total tax bill? Hint: Thinkabout marginal tax rates and the ability to shift incomefrom a higher marginal bracket to a lower one. Note: Donot round your intermediate calculations. Round yourfinal answers to nearest whole dollar amounts.

Your personal taxable income: $80,000Firm taxable income (net of your salary): $30,000Total taxable…

the firm with taxable income of $60,000? What allocation will minimize the total tax bill? Hint: Think about marginal tax rates and the ability to shift income from a higher marginal bracket to a lower one. Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollar amounts.

the firm with taxable income of $60,000? What allocation will minimize the total tax bill? Hint: Think about marginal tax rates and the ability to shift income from a higher marginal bracket to a lower one. Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollar amounts.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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