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Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $6,500 a year for
Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $6,500 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent. Note: Round your final answers to the nearest whole dollar amount. Required: a. What could Tawana do to reduce her family tax burden? b. How much pretax income does it currently take Tawana to generate the $6,500 (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 $6,500 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)? d. How much money would the strategy in part (c) save? Note: Round your intermediate calculations. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What could Tawana do to reduce her family tax burden? Employ her son in her sole proprietorship Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How much pretax income does it currently take Tawana to generate the $6,500 (after-taxes) given to Jonathon? Note: Round your answer to the nearest whole dollar amount. Pretax income $ 17,568 Required A Required B Required C Required D If Jonathon worked for his mother's sole proprietorship, what salary would she have to pay him to generate $6,500 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)? Note: Round your answer to the nearest whole dollar amount. Salary $ 7,647 Required A Required B Required C Required D How much money would the strategy in part (c) save? Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. This strategy will save Tawana $ 7,242 X pretax and will save the family after tax
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