Sylvester, Single, Has $12,000 in Deductions When Filing His Income

question 18

Essay

Sylvester, single, has $12,000 in deductions when filing his income tax return. His sole proprietorship averages net income of $125,000 annually. He needs $50,000 per year to live on. If he incorporates his business, would he pay more or less in total income taxes if he takes a salary of $50,000 for his living expenses? (Consider only income taxes.)

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Definitions:

Individual's Values

The personal beliefs or standards of behavior that guide an individual's decisions and actions.

Affirmative Action

Affirmative action is a policy or practice aimed at increasing the opportunities for historically and socially marginalized groups by taking into consideration factors like race, color, religion, sex, or national origin in decisions regarding hiring, promotion, and admission.

Minority Group Members

Individuals who belong to a subgroup within a population that is differentiated by its unique social, cultural, ethnic, or racial characteristics.

Women

Refers to adult human females, often highlighting their roles, challenges, and contributions within various societal contexts.