Let's break down the taxable income of \[tex]$64,000 according to the given tax brackets and calculate the tax payable step-by-step for each segment:
1. First bracket (\$[/tex]0 to \[tex]$9,875):
- The income within this bracket is \$[/tex]9,875.
- Tax Rate: 10%
- Tax: [tex]\( 10\% \times 9,875 = 0.10 \times 9,875 = \$987.50 \)[/tex]
2. Second bracket (\[tex]$9,876 to \$[/tex]40,125):
- The income within this bracket is \[tex]$40,125 - \$[/tex]9,875 = \[tex]$30,250.
- Tax Rate: 12%
- Tax: \( 12\% \times 30,250 = 0.12 \times 30,250 = \$[/tex]3,630 \)
3. Third bracket (\[tex]$40,126 to \$[/tex]85,525):
- The income within this bracket up to \[tex]$64,000 is \$[/tex]64,000 - \[tex]$40,125 = \$[/tex]23,875.
- Tax Rate: 22%
- Tax: [tex]\( 22\% \times 23,875 = 0.22 \times 23,875 = \$5,252.50 \)[/tex]
Finally, adding the tax from all segments:
- Total tax = Tax from the first bracket + Tax from the second bracket + Tax from the third bracket
- Total tax: [tex]\( \$987.50 + \$3,630 + \$5,252.50 = \$9,870 \)[/tex]
Therefore, the correct answer is:
C. [tex]\(10\% \times \$9,875 + 12\% \times (\$40,125 - \$9,875) + 22\% \times (\$64,000 - \$40,125)\)[/tex].
