Final answer:
The allowed housing expense is calculated by subtracting the total deductions (FICA, federal tax, and state tax) from the annual income of $53,698 to find the net income and then applying the common 30% rule for housing. The allowed expense for the year comes out to $11,574.61.
Step-by-step explanation:
To calculate the allowed housing expense for the year based on an annual income of $53,698 with deductions for FICA (7.65%), federal tax withholding (11.5%), and state tax withholding (9%), we first need to calculate the total deductions.
FICA deduction: $53,698 * 7.65% = $4,107.89
Federal tax withholding: $53,698 * 11.5% = $6,175.27
State tax withholding: $53,698 * 9% = $4,832.82
Now add the total deductions: $4,107.89 + $6,175.27 + $4,832.82 = $15,115.98
The net income after deductions is thus $53,698 - $15,115.98 = $38,582.02.
To find the allowed housing expense for the year, we will assume a certain percentage of the net income is allocated for housing. Although this question does not specify the percentage, a common guideline used is the 30% rule, which suggests that no more than 30% of your income should go toward housing.
Allowed housing expense = $38,582.02 * 30% = $11,574.61
The allowed housing expense for the year, rounded to the nearest penny, is $11,574.61.