Question
Tawana owns and operates a sole proprietorship and has a 37 percentage marginal tax rate. She provides her son, Jonathon, $8000 a year for college
Tawana owns and operates a sole proprietorship and has a 37 percentage marginal tax rate. She provides her son, Jonathon, $8000 a year for college expenses, jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15.
A) What could Tawana do to reduce her family tax burden
B) How much pretax income does it currently take Tawana to generate the $8000 (after taxes) given to jonathon.
C) If Jonathon worked for his mother's sole proprietorship, what salary would she have to pay him to generate $8000 after taxes (ignoring any social security, medicare, or self-employment tax issues)
D) How much money would the strategy in part(c) save?
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