Megan operates a housecleaning business as a sole proprietorship. She oversees a team of $10$ cleaning

personnel, markets the business, and provides supplies and equipment. The business has been

generating net taxable profits of $$52,000$ per year, before considering the QBI deduction. As a sole

proprietor, Megan qualifies for the $20$ percent deduction, reducing taxable income from the business to

$$41,600.$

Required:

a$.$ Assume that Megan's marginal tax rate on ordinary income is $35$ percent and that she has no

pressing need for cash flow from this business. Should Megan consider incorporating and operating

the business through a C corporation? Fill the below table to justify your answers. $($Ignore any payroll

or self$-$employment tax considerations.$)$

b$.$ How would your conclusion in part $($a$)$ change if Megan's marginal tax rate were only $28$ percent?

Complete this question by entering your answers in the tabs below.

Assume that Megan's marginal tax rate on ordinary income is $35$ percent and that she has no pressing need

business. Should Megan consider incorporating and operating the business through a C corporation? Fill the

your answers. $($Ignore any payroll or self$-$employment tax considerations.$)$