Your client has come to you because he is thinking about quitting his current job and starting his own sole proprietorship architecture practice. He knows there are different tax provisions that apply to sole proprietors, but he does not know the details so he is coming to you for help. He would like you to give him an estimate of the sales (business revenues) amount he would need to have the same net personal cash flow that he has with his current job, based on the rules in place for the 2021 tax year. (Assume he will receive all sales in cash during the tax year.) Your client explains that:

1. His salary is currently $80,000.

2. His current employer pays the full cost of his health insurance. He definitely wants health insurance coverage even if he is self-employed. He has investigated and found that the premiums on such a plan would cost him $10,000.

3.He expects the deductible expenses (all cash expenses) at his business would be $30,000.

NOTE: Assume He would keep all the net profit after paying for those expenses (i.e., for our purposes here he won't reinvest that cash back in the business).

4.He is unmarried with no dependents.

5.He lives in Nevada, so he does not pay state income tax. His home is paid off, so he does not have a mortgage, but he does pay $7,200 annually in property taxes.

6.He has heard about this new QBI deduction, but he does not know how to calculate it or whether it applies to sole proprietorships. You can assume that all of his business activity would be considered a qualified trade or business.

WHAT TO DO:

1. Please calculate an estimate of sales amount needed in order for him to have the same net personal cash flow he has with his current job if he chooses to go self-employed based on the information above.

2. Please complete this by using the GOAL SEEK function in Excel. If there are other ways to reach a similar amount, please describe these other processes as well

3. Please detail how you used the Goal Seek function to come to your answer