Assume that the corporate tax rate is 28% and the individual (personal) tax rate is 8%.

a) You are a member of a limited liability company. Your share of the LLC's pre-tax income is $15,000.

i) Calculate your total taxes (including any taxes paid by the LLC).

ii) Calculate your after-tax personal income.

b) Assume instead you are a shareholder of a corporation. Your share of the corporation’s pre-tax income is $15,000. The corporation distributes all after-tax corporate income as dividends.

i) Calculate your total taxes (including any taxes paid by the corporation)

ii) Calculate your after-tax personal income.

iii) Calculate your average tax rate (including any taxes paid by the corporation)

Note:

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Intermediate numbers used in calculations should be 4 decimal places, such as 1.8834, not 1.9.

Percentages should be rounded to 2 decimal places, such as 5.25%, not 5%.