Business
Business, 01.10.2019 03:00, luella614ox1zum

Mr. young operates a photography studio as a sole proprietorship. his average annual income from the business is $100,000. because mr. young does not need the entire cash flow for personal consumption, he is considering incorporating the business. he will work as a corporate employee for a $40,000 annual salary, and the corporation will accumulate its after-tax income to fund future business expansion. for purposes of this case, assume that mr. young’s marginal income tax rate is 32 percent and ignore any employment tax consequences. assuming mr. young's sole proprietorship does not qualify for the section 199a deduction, would mr. young decrease the annual tax burden on the business by incorporating? how would your answer change if mr. young's sole proprietorship qualifies for the 20 percent section 199a deduction?

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Mr. young operates a photography studio as a sole proprietorship. his average annual income from the...

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