Finding taxable income and income tax liability

Assignment Help Accounting Basics

Reference no: EM13972781

Tina owns and operates Timely Turn Tables (TTT) as a sole proprietorship. TTT's taxable income during the current year is $80,000. In addition to the TTT income, Tina has the following income and expenses during the current year:

Interest income	$11,000
Royalty income	28,000
Deductions for AGI	2,500
Deductions from AGI	12,000

a. What is Tina's current year taxable income and income tax liability?

b. Tina would like to lower her tax by incorporating Timely Turn Tables. How much income tax will she save if she incorporates TTT and pays herself a salary of $40,000?

Reference no: EM13972781

Questions Cloud

Through what potential difference did the charge move : A uniform electric field of magnitude 297 V/m is directed in the positive x direction. Through what potential difference did the charge move

Tax evasion or tax avoidance : For each of the following situations, state whether the taxpayer's action is tax evasion or tax avoidance.

Explain assess, and evaluate relevance to research project : An Annotated Bibliography is the result of a critical review of sources of information and the organization of those sources in preparation for writing the Research Project. The description and evaluation of sources allows students to choose speci..

Calculate the electric potential difference : A uniform electric field of magnitude 340 V/m is directed in the negative y direction as shown in the figure below. Calculate the electric potential difference VB

Finding taxable income and income tax liability : a. What is Tina's current year taxable income and income tax liability? b. Tina would like to lower her tax by incorporating Timely Turn Tables. How much income tax will she save if she incorporates TTT and pays herself a salary of $40,000?

Taxable income and income tax liability : What is Leroy and Amanda's current year taxable income and income tax liability?

Should the firm make this investment : Assume that this project requires a $400,000 investment today (or else the future cash flows will not happen). Should the firm make this investment?

Marginal tax bracket : Art is in the 28% marginal tax bracket for 2010. He owes a $10,000 bill for business expenses. Because he reports taxable income on a cash basis, he can deduct the $10,000 in either 2010 or 2011

Assuming the projects are independent : Assuming the projects are independent, which one or ones would you recommend? If the projects are mutually exclusive, which would you recommend?

User Account

All Pages