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Tawana owns and operates a sole proprietorship and has a 3 7 percent marginal tax rate. She provides her son, Jonathon, $ 7 , 5
Tawana owns and operates a sole proprietorship and has a percent marginal tax rate. She provides her son, Jonathon,
$ a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of
percent.
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 $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 $ after
taxes ignoring any Social Security, Medicare, or selfemployment tax issues
d How much money would the strategy in part c save?
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How much money would the strategy in part c save?
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