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Problem 15-23 (LO. 1) Purple Company has $200,000 in net income for 2021 before deducting any compensation or other payment to its sole owner, Kirsten.
Problem 15-23 (LO. 1) Purple Company has $200,000 in net income for 2021 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,550 standard deduction for 2021 (she has no other deductions). Purple Company is Kirsten's only source of income. Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations. Click here to access the 2021 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%. When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar. a. Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $37,490 deduction for qualified business income. Kirsten's taxable income is $ , and her after-tax income is $ b. Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten. Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%,15%,20%). For single taxpayers, the 0 percent rate applies to the first $40,400 of taxable income. Purple Corporation's after-tax income is and Kirsten's after tax income is c. Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000. Purple Corporation's after-tax income is $ and Kirsten's after-tax income is $
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