How much additional tax they will personally pay

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Reference no: EM131211650

June and John decide to form a business. They each plan to contribute 20,000 in exchange for a 50percent interest in the business. They will then take out a bank loan for 30,000 to cover the balance of their working capital needs. They expect that the business will make a profit of 64,000 in the first year and that it will not make any cash distributions that year. Excluding the business income, June, who files as head of household, has 475,000 of other ordinary taxable income. John is married and files a joint return, he and his wife have 130,000 of other ordinary taxable income. They want to know how much tax the business will pay and how much additional tax they will personally pay in 2015 if they form business as a partnership, S corporation, or C corporation. Consider only income taxes.

Reference no: EM131211650

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