Karl Thomas and Troy Bauman began a new consulting business on January 1, 2018. They organized the business as a C corporation, KT, Inc. During 2018, the corporation was successful and generated revenues of $2,400,000. KT had operating expenses of $715,000 before any payments to Karl or Troy. During 2018, KT paid dividends to Karl and Troy in the amount of $330,000 each. Assume that Karl's wife earned $110,000 from her job, they file a joint return, have itemized deductions of $30,000, and have no children. (Assume the qualified dividends tax rate is 15%.) Read the requirements (Click the icon to view the 2018 tax rate schedule for the Married filing jointly filing status.) (Click the icon to view the corporation tax rate information.) (Click the icon to view the standard deduction amounts.) Requirement a. Compute the total tax liability of KT and Karl and his wife for 2018. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Do not round intermediary calculations. Only round the amounts you enter in the input fields to the nearest cent. Use the tax rate schedule for necessary tax calculations.) Begin by calculating the tax liability for KT. Gross income 2400000 Minus: Operating expenses 715000 i Reference x Taxable income 1685000 Corporate tax 353850 A corporation's taxable income is subject to a flat tax rate of 21%. Compute the tax liability of Karl and his wife. Print 330000 Done Dividend income Salary income 110000 Adjusted gross income (AGI) 440000 Choose from any list or enter any number in the input fields and then continue to the next question Minus: Deductions from AGI: Itemized deductions 30000 410000 Taxable income Tax on taxable income without dividends (tax rate schedule) 16079 49500 Tax on dividends Total tax (Individual) 65579 Requirement b. Instead of organizing the consulting business as a C corporation, assume Karl and Troy organized the business as a limited liability company, KT, LLC. KT made a distribution of $330,000 each to Karl and Troy during 2018. Compute the total tax liability of KT and Karl for 2018. Ignore any and additional tax on net investment income. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Do not round intermediary calculations. Only round the amounts you enter in the input fields to the nearest cent. Use the tax rate schedule for necessary tax calculations. Enter a "0" for items with a zero balance.) Begin by calculating the tax liability for KT, LLC 2400000 Gross income Minus: Operating expenses 715000 Choose from any list or enter any number in the input fields and then continue to the next question. 1685000 Taxable income Corporate tax 353850 Compute the tax liability of Karl for 2018. Dividend income 330000 330000 Adjusted gross income (AGI) Minus: Deductions from AGI: Itemized deductions 30000 300000 Taxable income Tax on taxable income without dividends (tax rate schedule) Choose from any list or enter any number in the input fields and then continue to the next question. 45000 Tax on dividends Total tax (Individual) 45000 Choose from any list or enter any number in the input fields and then continue to the next question. Karl Thomas and Troy Bauman began a new consulting business on January 1, 2018. They organized the business as a C corporation, KT, Inc. During 2018, the corporation was successful and generated revenues of $2,400,000. KT had operating expenses of $715,000 before any payments to Karl or Troy. During 2018, KT paid dividends to Karl and Troy in the amount of $330,000 each. Assume that Karl's wife earned $110,000 from her job, they file a joint return, have itemized deductions of $30,000, and have no children. (Assume the qualified dividends tax rate is 15%.) Read the requirements (Click the icon to view the 2018 tax rate schedule for the Married filing jointly filing status.) (Click the icon to view the corporation tax rate information.) (Click the icon to view the standard deduction amounts.) Requirement a. Compute the total tax liability of KT and Karl and his wife for 2018. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Do not round intermediary calculations. Only round the amounts you enter in the input fields to the nearest cent. Use the tax rate schedule for necessary tax calculations.) Begin by calculating the tax liability for KT. Gross income 2400000 Minus: Operating expenses 715000 i Reference x Taxable income 1685000 Corporate tax 353850 A corporation's taxable income is subject to a flat tax rate of 21%. Compute the tax liability of Karl and his wife. Print 330000 Done Dividend income Salary income 110000 Adjusted gross income (AGI) 440000 Choose from any list or enter any number in the input fields and then continue to the next question Minus: Deductions from AGI: Itemized deductions 30000 410000 Taxable income Tax on taxable income without dividends (tax rate schedule) 16079 49500 Tax on dividends Total tax (Individual) 65579 Requirement b. Instead of organizing the consulting business as a C corporation, assume Karl and Troy organized the business as a limited liability company, KT, LLC. KT made a distribution of $330,000 each to Karl and Troy during 2018. Compute the total tax liability of KT and Karl for 2018. Ignore any and additional tax on net investment income. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Do not round intermediary calculations. Only round the amounts you enter in the input fields to the nearest cent. Use the tax rate schedule for necessary tax calculations. Enter a "0" for items with a zero balance.) Begin by calculating the tax liability for KT, LLC 2400000 Gross income Minus: Operating expenses 715000 Choose from any list or enter any number in the input fields and then continue to the next question. 1685000 Taxable income Corporate tax 353850 Compute the tax liability of Karl for 2018. Dividend income 330000 330000 Adjusted gross income (AGI) Minus: Deductions from AGI: Itemized deductions 30000 300000 Taxable income Tax on taxable income without dividends (tax rate schedule) Choose from any list or enter any number in the input fields and then continue to the next question. 45000 Tax on dividends Total tax (Individual) 45000 Choose from any list or enter any number in the input fields and then continue to the next