Given the details of Alex's taxable income and the relevant tax brackets and rates, let's calculate the taxes owed on his investment income step by step.
Firstly, Alex’s normal taxable income (excluding investments) is \[tex]$80,000.
To calculate taxes on his normal income:
1. For the first \$[/tex]9,525 at 10% rate:
[tex]\[
\$9,525 \times 0.10 = \$952.50
\][/tex]
2. For the next \[tex]$29,175 (\$[/tex]38,700 - \[tex]$9,525) at 12% rate:
\[
\$[/tex]29,175 \times 0.12 = \[tex]$3,501.00
\]
3. For the remaining \$[/tex]41,299 (\[tex]$80,000 - \$[/tex]38,701) at 22% rate:
[tex]\[
\$41,299 \times 0.22 = \$9,085.78
\][/tex]
Adding these together gives:
[tex]\[
\$952.50 + \$3,501.00 + \$9,085.78 = \$13,539.28
\][/tex]
This rounds to \[tex]$13,539.5 for precise calculation purposes.
Next, we need to add Alex’s short-term capital gains of \$[/tex]2,000 to his normal income (\[tex]$80,000) to get a total taxable income of \$[/tex]82,000.
For his qualified dividends of \[tex]$500:
Given his taxable income of \$[/tex]82,000, we look at the qualified dividends brackets:
1. Because \[tex]$82,000 falls between \$[/tex]38,601 and \[tex]$425,800, the tax rate for qualified dividends will be 15%.
Calculating the tax on his qualified dividends:
\[
\$[/tex]500 \times 0.15 = \[tex]$75.00
\]
Adding up the taxes for qualified dividends gives us a tax amount of \$[/tex]75.00 for that segment.
Therefore, Alex will owe [tex]\(\$75.00\)[/tex] in taxes on his investment income.
The correct answer to be filled in the box is:
[tex]\[
75
\][/tex]
