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Becky operates a business that produces $115,000 of income before any amounts are paid to her. She is married, and her spouse receives $85,000
Becky operates a business that produces $115,000 of income before any amounts are paid to her. She is married, and her spouse receives $85,000 of salary from an unrelated employer. They file jointly, have $27,500 of itemized deductions, and have no dependents. (The tax year is 2021.) (Click the icon to view the standard deduction amounts.) (Click the icon to view the 2021 tax rate schedule for the Married filing joint filing status.) Read the requirement. a. Becky operates the business as an S corporation receiving a salary from the corporation of $78,000. The corporation distributes all of its remaining income to the shareholders. Begin by calculating taxable income for Becky under this scenario. Minus: Taxable income Now enter the income tax that would be paid by Becky and the corporation under this scenario, and compute the total income tax. (Use the 2021 tax rate schedules for all tax calculations. Enter a "0" if no tax is due. Do not round any intermediary calculations. Round your final tax liability to the nearest whole dollar.) Income tax paid by Becky Corporation Total income tax Amount of tax Next compute the total income tax that would be paid assuming the additional facts under scenario (b). Ignore payroll taxes. b. She operates the business as a C corporation receiving a salary from the corporation of $78,000. The corporation distributes its after tax income to her as a dividend. Begin by calculating taxable income for Becky under this scenario. (Enter a "0" for any zero amounts.) Minus: Taxable income
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