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[Solved]: Tawana owns and operates a sole proprietorship and
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(Solved): Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides ...



Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $19,000 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? How much pretax income does it currently take Tawana to generate the $19,000 (after taxes) given to Jonathon? If Jonathon worked for his mother’s sole proprietorship, what salary would she have to pay him to generate $19,000 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)? How much money would the strategy in part (c) save?



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