310.9 Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax...
90.2K
Verified Solution
Link Copied!
Question
Accounting
310.9
Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $8,000 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent.
Required:
What could Tawana do to reduce her family tax burden? answer for this is employ her son in her sole proprietorship
How much pretax income does it currently take Tawana to generate the $8,000 (after taxes) given to Jonathon?
If Jonathon worked for his mother's sole proprietorship, what salary would she have to pay him to generate $8,000 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)?
How much money would the strategy in part (c) save?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
