Purple Company has $200,000 in net income for 2021 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,550 standard deduction for 2021 (she has no other deductions). Purple Company is Kirsten’s only source of income. Ignoring any employment tax considerations, compute Kirsten’s after-tax income if:

a. Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $37,490 deduction for qualified business income.

b. Purple Company is a C corporation and the corporation pays out all of its after tax income as a dividend to Kirsten.
c. Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000.