Final answer:
The total tax paid on a $5.00 dividend from an S corporation that earns $9.10 per share before taxes is not covered fully by any of the options given. However, based on standard S corporation taxation rules, where the income passes through to the shareholder, the total tax per share would be $2.226, with $0.75 in dividend taxes and $1.476 in personal taxes on the remaining income.
Step-by-step explanation:
The student is asking about the total amount of taxes paid when an S corporation that earns $9.10 per share before taxes pays a $5.00 dividend per share. While S corporations typically pass their corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes, for the sake of this scenario, we will consider tax implications of dividends and corporate income.
Firstly, the corporate tax rate does not apply to S corporations as they are pass-through entities. However, the personal tax rate on dividends would apply to the $5.00 dividend. The shareholder would pay 15% on this dividend income, leading to $0.75 per share in taxes. The remaining income of $4.10 ($9.10 earnings minus $5.00 dividend) would likely be considered as pass-through income, on which the shareholder would pay their personal tax rate of 36%, resulting in additional taxes of $1.476. Adding the two amounts of tax on dividend income and pass-through income together, the total tax paid per share would be $2.226.