43. Malvern Company has a net income in 2020 of $180,000, before considering the $130,000 payments...

 

 

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43. Malvern Company has a net income in 2020 of $180,000, before considering the $130,000 payments to its owner, Melva Malvern. Melva is married to Jim Malvern, and they do not have any children or other dependents. Melva and Jim are both 45 years of age. Their itemized deductions for the year total $27,900 under all scenarios. Required: Determine the following amounts, assuming that Malvern is a self- employed individual. Ignore any federal unemployment tax liability (FUTA), but do consider any allowable expense deductions for the FICA and/or self-employment tax. (See hints below.) Self-employment taxes paid 2$ Federal income taxes paid by Melva & Jim Malvern Total taxes paid 2. 44. Assume the same facts as Problem 43, except that Malvern Company is a corporation, and Melva and Jim are the only shareholders. Assume that $80,000 of the $130,000 payment to Melva is a reasonable salary, and the remaining $50,000 is a taxable dividend. FICA taxes paid in by Melva as an employee FICA taxes paid by Malvern Co. on Melva's salary Federal income taxes paid by Malvern Co. Federal income taxes paid by Melva & Jim Malvern Total taxes paid 43. Malvern Company has a net income in 2020 of $180,000, before considering the $130,000 payments to its owner, Melva Malvern. Melva is married to Jim Malvern, and they do not have any children or other dependents. Melva and Jim are both 45 years of age. Their itemized deductions for the year total $27,900 under all scenarios. Required: Determine the following amounts, assuming that Malvern is a self- employed individual. Ignore any federal unemployment tax liability (FUTA), but do consider any allowable expense deductions for the FICA and/or self-employment tax. (See hints below.) Self-employment taxes paid 2$ Federal income taxes paid by Melva & Jim Malvern Total taxes paid 2. 44. Assume the same facts as Problem 43, except that Malvern Company is a corporation, and Melva and Jim are the only shareholders. Assume that $80,000 of the $130,000 payment to Melva is a reasonable salary, and the remaining $50,000 is a taxable dividend. FICA taxes paid in by Melva as an employee FICA taxes paid by Malvern Co. on Melva's salary Federal income taxes paid by Malvern Co. Federal income taxes paid by Melva & Jim Malvern Total taxes paid

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Q43 Net Income 180000 Payment to owner 130000 Income after ... View the full answer