Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $15,000 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent.

Required:

1. What could Tawana do to reduce her family tax burden?
2. How much pretax income does it currently take Tawana to generate the $15,000 (after taxes) given to Jonathon?
3. If Jonathon worked for his mothers sole proprietorship, what salary would she have to pay him to generate $15,000 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)?
4. How much money would the strategy in part (c) save?