I:2-50 Income of Business Entities. Georgia owns all of Peach Corporation’s stock. Peach pays her a $70,000 salary, which reduces its before-tax profit to $30,000. Peach distributes all of its after-tax income to its shareholder, Georgia.

Georgia is married, and her spouse receives $90,000 of salary from an unrelated employer.

They file jointly, have $31,000 of itemized deductions, and have no dependents.

Compute the total income tax that is paid. Ignore payroll taxes.

a. Peach is an S corporation.

b. Peach is a C corporation.

c. How would the total income tax change in parts a and b if Peach does not distribute any of its after-tax profit to Georgia?