Solution-How much of the income should be converted

How much of the income should be converted

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Question - Moana is a single taxpayer who operates a sole proprietorship. She expects her taxable income next year to be $250,000, of which $200,000 is attributed to her sole proprietorship. Moana is contemplating incorporating her sole proprietorship. (Use the tax rate schedule.) Using the single individual tax brackets and the corporate tax rate, find out how much current tax this strategy could save Moana (ignore any Social Security, Medicare, or self-employment tax issues)

How much of the income should be converted into corporate income to maximize tax savings?

Reference no: EM132976766

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How much of the income should be converted

Reference no: EM132976766

Reference no: EM132976766

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