In problem 5.5, what taxes would Jack pay if he organized as a closely held corporation (as described) and, after paying his salary, also issued himself a dividend of $10,000?

Problem 5.5

Jack Flubber, who owns Sons of Flubber Construction Co., and runs it as a proprietorship, had gross profits last year of $80,000. His personal and family expenses are $52,000 and he has $7,000 in exemptions and deductions. He paid $17,000 in taxes. If he paid himself a salary of $55,000 taxed at 20%, would it be advantageous for him to incorporate as a closely held corporation? Explain.