Problem $3-52($LO $3-4)($Static$)$

Moana is a single taxpayer who operates a sole proprietorship. She expects her taxable income next year to be $$250,000,$ of which

$$200,000$ is attributed to her sole proprietorship. Moana is contemplating incorporating her sole proprietorship. $($Use the tax rate

schedule.$)$

Required:

a$.$ Using the single individual tax brackets and the corporate tax rate, find out how much current tax this strategy could save Moana

$($ignore any Social Security, Medicare, or self$-$employment tax issues$).$

b$.$ How much income should be left in the corporation?

Complete this question by entering your answers in the tabs below.

Required A

Using the single individual tax brackets and the corporate tax rate, find out how much current tax this strategy could save

Moana $($ignore any Social Security, Medicare, or self$-$employment tax issues$).$

Current tax saved

$2023$ Tax Rate Schedules

Individuals

Schedule X$-$Single

Schedule Y$-1-$Married Filing Jointly or Qualifying surviving spouse

Schedule Z$-$Head of Household

Schedule Y$-2-$Married Filing Separately