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Maryanne a single taxpayer, operates a mini mart. She is considering either continuing the business as a sole proprietorship or reorganizing it as either a

Maryanne a single taxpayer, operates a mini mart. 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 25,000 of profits from the business annually while minimizing her total tax liability. She expects the business to generate annually 47,000 of taxable income, all of which qualifies as pass-through income before considering a deductible salary expense.

Which business form(s) can best achieve Maryanne goals?

Complete the table to determine the amount of tax for each business form:

Sole

C Corporation

C Corporation

S Corporation

S Corporation

Proprietorship

with Salary

with Dividend

with Salary

with Distribution

Entity Level:

Income before salary

Salary deduction

Taxable income

Entity level tax

Maryanne:

Pass-through income

Qualified business income deduction

Salary income

Dividend income

Total income to Maryanne

Maryannes Tax

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