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Helly holds a 1 0 0 - percent stake in Macro Data Incorporated ( MDI ) , an S corporation operating a qualified trade or

Helly holds a 100-percent stake in Macro Data Incorporated (MDI), an S corporation operating a qualified trade or business. In the current year, MDI reports $20,000 of ordinary business income (before deducting any wages paid to Helly). Helly can exert influence over the amount of wages she is paid by MDI and although she recognizes that MDI can only deduct a reasonable wage, she is considering some extreme alternatives to judge the possible effects. Determine the following items below, considering Helly could pay herself wages of $1,000 versus wages of $20,000.
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a. The amount of total employment taxes paid by Helly and MDI on the wages (assume Hellys total wages and self-employment income are below the current year FICA cap)?
Employment taxes of Wages of $1,000? Employment taxes of wages of $20,000?
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b. Assuming Helly has a 25-percent marginal tax rate, the amount of income taxes on her wages?
Employment taxes for wages of $1,000? Employment taxes for wages of $20,000?
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c. Assuming Helly has a 25-percent marginal tax rate, the amount of income taxes on her allocation of ordinary business income from MDI (Ignore the deduction MDI can take for employment taxes)?
Allocated income for wages of $1,000? Allocated income for wages of $20,000?
Income taxes for wages of $1,000? Income taxes for wages of $20,000?

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