I am having trouble with the following problem in determining if the strategy will minimize Mr. Whit's payroll tax. Please provide an explanation with your answer.
Mr. Whit is the sole shareholder and CEO of newly incorporated Talawanda Concepts. He plans to pay himself a reasonable $100,000 annual salary. However, the corporation will pay his first-year salary on a monthly basis and the entire second year salary on December 31. The corporation will pay nothing to him during the second calendar year, and then it will repeat the payment cycle in the third calendar year. Talawanda will fund each year-end salary prepayment through short-term loans from a local bank. The purpose of this odd payment schedule is to avoid Social Security tax on Mr. Whit's base salary in alternating years. Will this strategy to minimize his payroll tax actually work?
This question was answered on: Sep 16, 2020
Need a similar solution fast, written anew from scratch? Place your own custom order
We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.