Sylvester, single, has $10,400 in deductions when filing his income tax. His sole proprietorship averages net income of $125,000 annually. He needs $50,000 per year to live on. If he incorporates his business, would he pay more or less in total income taxes if he takes a salary of $50,000 for his living expenses? (Consider only income taxes.)

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The Answer of Sylvester, single, has $10,400 in deductions when filing his income tax. His sole proprietorship averages net income of $125,000 annually. He needs $50,000 per year to live on. If he incorporates his business, would he pay more or less in total income taxes if he takes a salary of $50,000 for his living expenses? (Consider only income taxes.)

Sylvester, Single, Has $10,400 in Deductions When Filing His Income