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Calculate self$-$employment taxes, income taxes, QBI income and deductions, IGNORE itemized$/$standard deductions. Alfred is starting a butler outsourcing company. He isn't sure what entity would be best and he needs your help. Below are his estimates for the business. With the information you will need to calculate the total tax for each entity $($sole proprietorship, partnership, $S$ corporation, C corporation$)$ If he adds a partner$/$shareholder to the business you will need to calculate the tax for all partners$/$shareholders and add them together. His marginal tax rate is $25\%.$

Sole Proprietorship

He anticipates making $$95,000$ as a sole propietorship.

Total Tax as a sole proprietorship

Partnership

He is considering having Bruce own $5\%$ of his venture to help encourage Bruce's rich friends to use his new business. He expects the business income to be $$95,000$ before considering his guaranteed payment of $$45,000.$ Bruce's marginal tax rate is $32\%$ and is a passive partner. He will take a distribution of $$15,000$ and Bruce will take out $$789.$

Total Tax for both Bruce and Alfred as a partnership

C Corporation

He is considering having Bruce own $5\%$ of his venture to help encourage his rich friends to use his new business. He expects the business income to be $$95,000$ before considering his $$45,000$ wage. Bruce's marginal tax rate is $32\%.$

He will take a distribution of $$34,941$ and Bruce will take out $$1,839.$

Total Tax for both Bruce and Alfred as a partnership

S Corporation

He is considering having Bruce own $5\%$ of his venture to help encourage his rich friends to use his new business. He expects the business income to be $$95,000$ before considering his $$45,000$ wage. Bruce's marginal tax rate is $32\%.$ He will take a distribution of $$34,941$ and Bruce will take out $$1,839.$

Total Tax for both Bruce and Alfred as a partnership

Which entity would you suggest Alfred seriously consider and why? Don't forget to include non$-$tax items to consider.

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