Your Bookstore Is Set Up as an Incorporated Business

question 93

Essay

Your bookstore is set up as an incorporated business.If you draw $70,000 from your bookstore as your salary,such that your bookstore's taxable income for the year becomes $30,000,how much personal tax and corporate tax must you pay to the federal government? By how much would your taxes change if you reduce your salary to $27,950,such that your bookstore's taxable income becomes $72,050? Assume that you pay personal taxes as an unmarried taxpayer,and that the tax rates are as shown below.

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Definitions:

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