Orie and Jane, husband and wife, operate a sole proprietorship. They expect their taxable income next year to be $450,000, of which $250,000 is attributed to the sole proprietorship. Orie and Jane are contemplating incorporating their sole proprietorship. (Use the tax rate schedule).

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Fisher Payne

Business

2 June, 04:22

Orie and Jane, husband and wife, operate a sole proprietorship. They expect their taxable income next year to be $450,000, of which $250,000 is attributed to the sole proprietorship. Orie and Jane are contemplating incorporating their sole proprietorship. (Use the tax rate schedule).

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Keenan Cantu · Answer 1

If Orie and Jane converted the sole proprietorship over to a corporation, the income would be taxed at a lower overall rate. The total tax saved would be 19,791

The total let in the company, to decrease the tax liability, would be 172,600