You are a new tax staff accountant at a local CPA firm. During your first week on the job a client, Ms. Macchiato, came into the firm seeking tax advice. In particular, Ms. Macchiato owns a small coffee shop, called the No-Doze Café. Ms. Macchiato currently operates the No-Doze Café as a sole proprietorship but is considering incorporating the business as an S corporation. Ms. Macchiato works full-time in the business; if she converts the business to an S corporation, she will pay herself a reasonable salary equal to 30% of No-Doze Café’s annual income. Ms. Macchiato has hired your firm to prepare an analysis of the tax implications of converting No-Doze Café from a sole proprietorship to an S corporation at varying levels of projected business income. Your manager has asked you to construct an Excel spreadsheet that will allow you to compare the total federal income tax and payroll/self-employment tax liability due when operating a business as a sole proprietorship as opposed to an S corporation. Use this spreadsheet to calculate the tax consequences to Ms. Macchiato of incorporating No-Doze Café as an S corporation, assuming the business alternatively earns an annual taxable income of $75,000, $150,000, $225,000, or $300,000 (before considering any salary payments to Ms. Macchiato and associated payroll tax expenses). Importantly, your spreadsheet should produce the “correct answer” simply by entering a particular level of business income. That is, the formulas in your spreadsheet must be flexible enough to accommodate the different tax provisions that apply at varying income levels without editing any cells besides the income itself. Use 2019 tax rates and tax law, including the Qualified Business Income deduction, in your analysis (you may ignore the QBI deduction wage and asset limitations but not the income limitation). Be sure that your analysis incorporates self-employment and payroll taxes, not just federal income taxes. You may ignore any state tax implications. Ms. Macchiato is married and files jointly with her spouse. Neither Ms. Macchiato nor her spouse has any other sources of income or deduction besides No-Doze Café and their applicable standard deduction. The couple does not have children or other dependents.