Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of EDP Auditing

Authors: Michael A. Murphy, Xenia Ley Parker

2nd Edition

0791304116, 978-0791304112

More Books

Students also viewed these Accounting questions