What taxes do you pay from your salary in the USA

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In the United States, paychecks are typically issued in the form of a check (paycheck or paystub), which must be cashed at a bank, credit union, or other financial institution. Alternatively, your employer can deposit your paycheck directly into your bank or credit union account. Many employers offer this opportunity, writes the government portal Consumer.gov.

You will receive a pay stub along with your paycheck. Sometimes it is called a salary certificate. The pay stub includes information about how much money you earned, how long you were paid for, and what taxes or other fees were deducted from your paycheck. What else you need to know about your paycheck - in questions and answers.

What is a salary before deductions?

This is the whole amount of money you earned. But in your hands you get a part of it - after taxes and compensation.

Real, or net salary - this is just the amount specified in your payroll check. From the amount of your salary before deductions, the employer calculates taxes and compensation. The remaining amount - is the real salary "at hand".

What's happened FICA?

FICA is the Federal Social Security Act. This acronym is also used to refer to the amount the federal government deducts from your paycheck for the government's Social Security and Medicare programs.

What a retention taxes?

By law, your employer must deduct money from your paycheck for taxes. You can choose from which amount of your salary to deduct. When your life circumstances change, it may happen that you will owe more (or less) taxes than before.

What's happened W-2?

This is a form provided by your employer at the end of each year. In the form of W-2 you can see how much money you earned in a year and how much money you have deducted for this period. The form will come in handy when you file your income statement with the IRS or some state governments.

Where can I cash my paycheck?

This can be done in different institutions, but some of them charge a commission for this. Checks are cashed in:

• banks and credit unions
• some stores (usually grocery or 24-hour)
• collection stores.

Cashing a check at your bank or credit union is usually free. Sometimes the bank indicated on the check can cash it, even if you do not have an account.

In other institutions and companies they will charge you for this operation. Call them, go there or check this information on the site before you cash the check. As a rule, high commissions are in collection stores.

Why use direct funds transfer?

If you transfer funds directly, you receive them on payday. You will not have to wait in line for cashing a check, pay a commission for it; besides, you do not risk losing your check.

To take advantage of the direct transfer of funds, you must have an account in a bank or credit union. Perhaps this requires some additional action.

Why do I bring home less money than I earn?

Your employer withholds part of your paycheck for taxes. By law, employers are required to deduct amounts for:

• state taxes
• federal taxes
• FICA (Social Security Taxes and Medicare)
• disability or unemployment insurance.

Employers also keep the amount on bonuses and compensation if they are due to you. This includes health insurance and payments to your retirement savings account.

Why is it necessary for my employer to withhold the amount for the retirement account?

As long as you retire, this money will multiply. One type of retirement savings account is called 401 (k). Other employers offer a plan whereby they add exactly as much money to your retirement account as you put in there.

When do I need to change my tax deduction?

When changes occur in your personal life - for example, you get married or have a child - the tax amount in these cases will change. It may be that after the change you will have to pay more or less taxes than before.

Life situations that may affect taxes:

• family or divorce
• birth of a child
• transition to a new job.

What should I do with my payment receipts?

Keep receipts for the last year. Your employer will send you a W-2 form at the end of the year. Check the form data with your receipts (in terms of the amounts paid to you and the taxes withheld by the employer). If all the numbers converge, you can throw away the receipts for the last year, but it is advisable to destroy them on the shredder - they indicate your social security number, which someone can use for illegal purposes.

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