Tax planing strat:

Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $9,000 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 $9,000 (after-taxes) given to Jonathon?

c)If Jonathon worked for his mothers sole proprietorship, what salary would she have to pay him to generate $9,000 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.