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Purple Company has $200,000 in net income for 2019 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and
Purple Company has $200,000 in net income for 2019 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12.200 standard deduction for 2019. Purple Company is Kirsten's only source of income. Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations. Click here to access the 2019 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%. When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar. a. If Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten daims a $37.560 deduction for qualified business income. Kirsten's taxable income is J. and her after-tax income is s b. Purple Company is a c corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten. Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%, 15%, 20%). For single taxpayers, the 0 percent rate applies to the first $38,600 of taxable income. Purple Corporation's after-tax income is and Kristen's after tax income is s C Purple Company is a c corporation and the corporation pays Kirsten a salary of $158,000. Kirsten's after-tax income is
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