How much will she take home under each method

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Jill Meier is the sole owner of Meier Corp., which provides her only source of income. Jill has always paid herself entirely by drawing dividends fom her corporation. A friend suggested that as long as she is earning about what she would have to pay someone else to run the business she, she might be better off paying herself a salary omstead of dividends because she would avoid the problem of double taxation. If Jill's company earns $120,000, all of which she will pay to herself, how much will she take home under each method? Assume a corporate tax rate of 25% on both salary and dividend income.

Reference no: EM131176476

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