The number on your offer letter is not the number that reaches your bank account. Federal income tax, payroll taxes, and often state and city taxes are withheld first.
Reading your paycheck
A US pay stub separates gross pay, pre-tax deductions such as retirement and health premiums, taxes withheld, and net pay. Small W-4 choices change the outcome noticeably.
- Federal income tax withholding
- Social Security and Medicare contributions
- State and sometimes city income tax
- Pre-tax benefit deductions
Filing season
Filing reconciles what was withheld against what you actually owe. Over-withholding produces a refund; under-withholding produces a bill and possibly a penalty.
Residency status for tax purposes is not identical to immigration status, which is a frequent source of confusion for newcomers.
