Final answer:
To find the discretionary income, we subtract all taxes and work-related expenses from the gross earnings. After doing the math, the discretionary income for the week is $182.77.
Step-by-step explanation:
Calculation of Discretionary Income
To calculate the discretionary income for the week, we need to consider the net income after taxes and deductions, and subtract the expenses incurred. Here's a step-by-step breakdown:
- Calculate gross income: 40 hours × $8.75/hour = $350.
- Calculate total deductions: 7.65% of FICA + 12% federal withholding + 8% state withholding = 27.65% total deduction percentage.
- Total deductions from gross income: $350 x 27.65% = $96.78.
- Net income after deductions: $350 - $96.78 = $253.22.
- Total daily expenses (transportation + lunch): $4.25 + $3.85 = $8.10/day.
- Total weekly expenses on transportation and lunch: $8.10/day × 5 days = $40.50.
- One-time expense for black slacks: $29.95.
- Total weekly expenses: $40.50 (transportation and lunch) + $29.95 (slacks) = $70.45.
- Discretionary income for the week: $253.22 (net income) - $70.45 (total expenses) = $182.77.
After considering all deductions and expenses, the discretionary income for the week is $182.77.