Karen, Single with the Standard Deduction Being the Only Deduction

question 37

Essay

Karen, single with the standard deduction being the only deduction for her individual tax return, wants to set up a business. She will use either a sole proprietorship or incorporate as a regular corporation. She expects the business to earn $160,000 after all expenses and payments to Karen except for federal taxes. Karen will take $40,000 from the business for living expenses (as a distribution from a sole proprietorship or a salary from a corporation). Considering only income taxes for 2018, should she establish the business as a C corporation or as a sole proprietorship?

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Definitions:

Patriarchy

A social system in which males hold primary power, predominating in roles of political leadership, moral authority, and control over property.

Economic Production

The process of creating goods and services through the combination of labor, materials, and capital to generate value.

Sexual Difference Theories

Theories that explore the significance of gender and sexual differences in social, psychological, and cultural contexts.

Gender Differences

Gender differences refer to distinctions in characteristics, roles, behaviors, and psychological phenomena between males and females, often shaped by cultural and social influences.