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Elle has income and deductions as a consultant for 2020 that are summarized as follows: Gross income from sole proprietorship $159,500 Cash operating expenses for

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Elle has income and deductions as a consultant for 2020 that are summarized as follows: Gross income from sole proprietorship $159,500 Cash operating expenses for sole proprietorship 34,250 Elle pays for her own medical insurance coverage (for herself and her immediate family) at $950 per month and places $800 per month in a personal retirement account. Elle' primary client, Cheng Ltd., has offered her a job with a salary of $104,500. The company will provide equivalent medical coverage, cover all business expenses, and match Elle's contributions to a $ 401(k) plan up to $400 per month. You should estimate the value of unemployment coverage and workers' compensation coverage that are available to employees, but not self-employed persons. If in doubt, use 4% and 4%, respectively, of salary. Complete an analysis of Elle's net cash flow currently, and assuming Elle sees no substantial differential risks, Elle's net cash flow if Elle accepts the offer. Advise Elle as to whether she should accept the offer Elle's other income is equal to her other deductions, so you may assume that this is her taxable income. You may assume that the marginal tax on this income is 17 percent. Show your work! Hint: The only income tax that is "relevant" is the difference in the tax on the income under the two possibilities. For example, if taxable income of $10,000 is being compared to taxable income of $12,000, the difference in the tax is $2,000 x the rate. The tax on $10,000 is not "relevant." Elle has income and deductions as a consultant for 2020 that are summarized as follows: Gross income from sole proprietorship $159,500 Cash operating expenses for sole proprietorship 34,250 Elle pays for her own medical insurance coverage (for herself and her immediate family) at $950 per month and places $800 per month in a personal retirement account. Elle' primary client, Cheng Ltd., has offered her a job with a salary of $104,500. The company will provide equivalent medical coverage, cover all business expenses, and match Elle's contributions to a $ 401(k) plan up to $400 per month. You should estimate the value of unemployment coverage and workers' compensation coverage that are available to employees, but not self-employed persons. If in doubt, use 4% and 4%, respectively, of salary. Complete an analysis of Elle's net cash flow currently, and assuming Elle sees no substantial differential risks, Elle's net cash flow if Elle accepts the offer. Advise Elle as to whether she should accept the offer Elle's other income is equal to her other deductions, so you may assume that this is her taxable income. You may assume that the marginal tax on this income is 17 percent. Show your work! Hint: The only income tax that is "relevant" is the difference in the tax on the income under the two possibilities. For example, if taxable income of $10,000 is being compared to taxable income of $12,000, the difference in the tax is $2,000 x the rate. The tax on $10,000 is not "relevant

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