Question
Blue Eyed Beauty Supply is the talk of the town. When Elaine started her business, she had no idea it would evolve to be the
| Blue Eyed Beauty Supply is the talk of the town. When Elaine started her business, she had no idea it would evolve to be the number one supplier of cosmetology supply in the region. While her business has been successfully operating as a sole proprietorship for many years, her legal counsel has urged her to form a separate legal entity for a variety of nontax reasons. Elaine will form an LLC but has come to you for advice as to which tax classification is best positioned to pay the least overall tax. She has provided you with her 2022 tax data and the following assumptions to develop an Excel model: Elaine is Single and her sole source of income is from her business activities It is expected that her business meets the definition of a trade or business for Qualified Business Income deduction purposes The business generates $140,000 of net income before contemplating any taxes Elaine is assuming a reasonable compensation amount of $50,000 As a C Corporation, the business will dividend out all earnings after taxes are paid to Elaine
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Each answer must have correct formula. All Cells with ? need answer. provide answer with correct Ms EXCEL Formula.
| Schedule X - Single | |||
| If taxable income is over: | But not over: | The tax is: | Plus: |
| $- | $10,275.00 | $- 0 | 10% |
| $10,275.00 | $41,775.00 | ? | 12% |
| $41,775.00 | $89,075.00 | ? | 22% |
| $89,075.00 | $170,050.00 | ? | 24% |
| $170,050.00 | $215,950.00 | ? | 32% |
| $215,950.00 | $539,900.00 | ? | 35% |
| $539,900.00 | $- | ? | 37% |
| Schedule C | |
| Schedule C Income | $140,000.00 |
| Self-Employment Tax | ? |
| Less: 50% Self-Employment Tax | ? |
| AGI | ? |
| Less: Standard Deduction | $12,950.00 |
| Less: QBI | ? |
| Taxable Income: | ? |
| If taxable income is over: | ? |
| But not over: | ? |
| The tax is: | ? |
| Plus tax percentage: | ? |
| Plus tax amount: | ? |
| Ordinary Personal Income Tax | ? |
| Overall Total Tax | ? |
| Overall Tax Rate | ? |
| S Corporation | |
| W-2 Income | $50,000.00 |
| Less: Employee Share of Payroll Taxes | ? |
| Net W-2 Compensation | ? |
| S Corporation Income Before Payroll Tax | $90,000.00 |
| Less: S Corporation Payroll Tax | $3,825.00 |
| Other Income - S Corp K-1 | $86,175.00 |
| AGI | ? |
| Less: Standard Deduction | $12,950.00 |
| Less: QBI | ? |
| Taxable Income: | ? |
| If taxable income is over: | ? |
| But not over: | ? |
| The tax is: | |
| Plus tax percentage: | ? |
| Plus tax amount: | ? |
| Ordinary Personal Income Tax | ? |
| Overall Total Tax | ? |
| Overall Tax Rate | ? |
| C Corporation | |
| W-2 Income | $50,000.00 |
| Less: Employee Share of Payroll Taxes | ? |
| Net W-2 Compensation | ? |
| C Corporation Income Before Payroll Tax | $90,000.00 |
| Less: C Corporation Payroll Tax | ? |
| C Corporation Taxable Income | ? |
| C Corporation Income Tax | ? |
| AGI | ? |
| Less: Standard Deduction | $12,950.00 |
| Taxable Income | ? |
| If taxable income is over: | ? |
| But not over: | ? |
| The tax is: | ? |
| Plus tax percentage: | ? |
| Plus tax amount: | ? |
| Ordinary Personal Income Tax | ? |
| Dividend From C Corporation | |
| Qualified Dividends Tax | ? |
| Total Personal Tax | ? |
| Overall Total Tax | ? |
| Overall Tax Rate | ? |
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