Problem
Assume that the corporate tax rate is 28% and the individual (personal) tax rate is 8%.
A. You are a member of a limited liability company. Your share of the LLC's pre-tax income is $15,000.
a. Calculate your total taxes (including any taxes paid by the LLC).
b. Calculate your after-tax personal income.
B. Assume instead you are a shareholder of a corporation. Your share of the corporation's pre-tax income is $15,000. The corporation distributes all after-tax corporate income as dividends.
a. Calculate your total taxes (including any taxes paid by the corporation)
b. Calculate your after-tax personal income.
c. Calculate your average tax rate (including any taxes paid by the corporation)