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Lilianna, a single taxpayer, operates a grocery store . She is considering either continuing the business as a sole proprietorship or reorganizing it as either
Lilianna, a single taxpayer, operates a grocery store . She is considering either continuing the business as a sole proprietorship or reorganizing it as either a C corporation or an S corporation. Her goal is to withdraw $24,000 of profits from the business annually while minimizing her total tax liability. She expects the business to generate annually $45,000 of taxable income, all of which qualifies as pass-through income before considering a deductible salary expense. Complete the table to determine the amount of total tax for each business form. Start with the entity level, then determine Lilianna 's tax and finally the total tax. (Use parentheses or a minus sign for numbers to be subtracted. Complete all input fields. For entries with a $0 balance, make sure to enter a 0 in the appropriate column. For simplification purposes, please use a 22% tax rate to calculate the tax on Lilianna's ordinary income; do not use the tax rate schedules.)
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