(2 Points) Samantha is operating her gift shop as a sole proprietor. She has been reading about tax reform changes and is wondering if she should incorporate her business as a C-Corporation to limit her personal liability and potentially lower her 2020 income tax bill. Samantha is projecting herself to be in the 32% individual income tax bracket for ordinary income, which equates to the 15% income tax bracket for any long-term capital gain income. Assuming that Samantha has been making a $130,000 profit each year at the gift shop, how much could she save (or how much more would it cost) in 2020 taxes under the following scenario. Consider both entity-level and individual level taxes. You can ignore any self-employment taxes, standard deduction, or QBI deduction for this question. As a reminder the new corporate income tax rate for C-Corporations after tax reform is a flat 21%. (A) Samantha incorporates, receives an $80,000 salary from the corporation, and leaves the remainder of the corporate profits in the business to invest and help it grow. Hint: To quantify the tax savings or tax cost from incorporating you will need to establish a baseline for how much income tax Samantha is already paying based on her existing Schedule C structure.