Carol has recently incorporated her sole proprietorship and is considering making an S election.The corporation has $200,000
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Carol has recently incorporated her sole proprietorship and is considering making an S election.The corporation has $200,000 of gross revenue and expenses of
$75,000 before Carol’s salary. She plans to take a gross salary of $60,000 from the business and this will be her only income for the year. Compare the total tax burden for Carol and the corporation with and without the S election. Consider both income and employment taxes. Carol is single and does not itemize her deductions.
She plans to reinvest all of the corporation’s net income after taxes into the business. Based on tax burden alone for 2007, should Carol make the S election?
AppendixLO1
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Related Book For
Taxation For Decision Makers 2008
ISBN: 9780324654110
2nd Edition
Authors: Shirley Dennis-Escoffier, Karen A. Fortin
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