You have recently been hired as the business manager of a dental office. Your employers, the two dentists that own the practice, are considering a number of changes to their practice. Using the information youve learned in this course and generally in your degree and the facts provided on the next page, please draft an answer to each of the questions provided on the next page. Your answer should be a minimum of three pages in length (though it may be considerably longer) and should address each of the provided questions. Please explain your work and any calculations that you complete as part of that work. Finally, for all questions but question 1, please make the following assumptions:

1. The federal income tax rate is 39.6%.

2. The C-corporate income tax rate is 35%.

3. The Self-Employment tax rate is 15.3%.

4. The Social Security tax rate is 6.2% (employer) and 6.2% (employee).

5. The Medicare tax rate is 1.45% (employer) and (1.45 (employee).

6. The Medicare Surtax does apply.

7. The maximum Section 179 amount is $100,000 per year. 50% bonus depreciation is available.

If you make any other assumptions in your case analysis, please notate them and explain your reasoning.

Currently, the business is organized as a partnership. Each of the dentists takes a $20,000 monthly draw from the business as a guaranteed payment. They have a staff dentist who is an employee of the practice who is paid $140,000 per year. In the current year, the businesss profits after payment of the guaranteed payments are expected to be an additional $800,000, which is divided equally between the owners.

Currently the business reports its taxes on the cash basis. The business is located in a rural renewal community; however, the business does not currently complete any paperwork relating to the work opportunity tax credit. The business owners are grateful the small community in which they have made their business and regularly donate 20% of the businesss net profit to local religious and charitable organizations. The business owners would like to upgrade their X-Ray equipment to expand the businesss offerings. They are proposing to spend $400,000 on the new equipment and expect the equipment to generate incremental earnings of $80,000 a year for each of the next 8 years.

1. How does the owners charitable business giving impact the businesss organizational structure options?