Total tax burden for carol and the corporation

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Carol recently incorporated her sole proprietorship and is considering making an S election. The corporation generates $200,000 of gross revenue and incurs expenses of $75,000, before paying Carol's salary. She plans to take a gross salary of $60,000 from the business, and this will be her only income for the year.

Task:

Compare the total tax burden for Carol and the corporation with and without the S election. Consider both income and employment taxes. Carol is single and does not itemize her deductions. She plans to reinvest the corporation's net income after taxes into the business.

Reference no: EM13151771

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