Jayzee Is a Single Taxpayer Who Operates a Sole Proprietorship

question 82

Essay

Jayzee is a single taxpayer who operates a sole proprietorship.He expects his taxable income next year to be $150,000,of which $125,000 is attributed to his sole proprietorship.Jayzee is contemplating incorporating his sole proprietorship.Using the 2017 single individual tax brackets and the corporate tax brackets,how much current tax could this strategy save Jayzee? (Ignore any Social Security,Medicare,or Self Employment Tax issues.)How much income should be retained in the corporation? (Use tax rate schedule in the text; Corporate tax rate schedule in the text)

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Definitions:

Upper Portion

The top segment or section of something, typically referring to physical objects, body parts, or geographical areas.

Entire Body

Referring to the whole of a person's or organism's body including all of its parts and systems.

Parietal Lobe

A region of the brain located at the upper back area in the skull, crucial for processing sensory information from various parts of the body, understanding spatial orientation, and navigation.

Frontal Lobe

The part of the brain located at the front of the cerebral cortex, responsible for executive functions such as decision-making, problem-solving, and controlling behavior and emotions.