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Tawana owns and operates a sole proprietorship and has a 40 percent marginal tax rate. She provides her son, Jonathon, $15,000 a year for college

Tawana owns and operates a sole proprietorship and has a 40 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.

1.What could Tawana do to reduce her family tax burden?

a..Employ her son in her sole proprietorship

b.Ask Jonathon to find a new job

c. Start a new enterprise

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)? (Round your answer to the nearest whole dollar amount.)

4.How much money would this strategy save? (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

This strategy will save tawana_____pretax and will save the family_____after tax.

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