To find the allowed housing expense for the year, we first need to calculate your take-home pay after all the deductions. Here's how you can do that step by step:
- Calculate the total deductions based on your annual income.
Total annual income: $53,698.00
FICA deduction (7.65%): \[ \text{FICA} = 53,698 \times 0.0765 = 4,103.69 \]
Federal tax withholding (11.5%): \[ \text{Federal Tax} = 53,698 \times 0.115 = 6,169.77 \]
State tax withholding (9%): \[ \text{State Tax} = 53,698 \times 0.09 = 4,831.82 \]
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Now, sum up the deductions: \[ \text{Total Deductions} = \text{FICA} + \text{Federal Tax} + \text{State Tax} \] \[ \text{Total Deductions} = 4,103.69 + 6,169.77 + 4,831.82 = 15,105.28 \]
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Next, calculate your take-home pay: \[ \text{Take-home Pay} = \text{Annual Income} - \text{Total Deductions} \] \[ \text{Take-home Pay} = 53,698 - 15,105.28 = 38,592.72 \]
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Now, the allowed housing expense typically is a percentage of your take-home pay. A common guideline suggests that around 30% of your take-home pay can be allocated to housing expenses. Let's calculate that: \[ \text{Allowed Housing Expense} = \text{Take-home Pay} \times 0.30 \] \[ \text{Allowed Housing Expense} = 38,592.72 \times 0.30 = 11,577.82 \]
Therefore, the allowed housing expense for the year is $11,577.82.
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