Money Matters

Opening a Bank account

A bank account makes living in the U.S. easier and is a good way to protect your money. There are several different types of accounts, including savings and checking. We recommend you choose a checking account at a bank that has no minimum balance requirement or ATM fees. It is also smart to choose a bank with a branch or ATM near your residence or host organization. You can go with any provider.  To open an account, you will need these documents:

· Your passport and J-1 visa

· Your DS-2019 form

· Proof of your Social Security application (or Social Security number, if you have received it)

· Proof of address, such as your rental agreement (or lease)

· A letter from your host organization confirming your position (not always required)

Taxes while in the USA

If you have a paid internship, you will likely get paid weekly or every other week, either by check or direct deposit into your bank account. Your host organization will provide a statement showing the number of hours of training, pay, and the taxes and other deductions taken out of your pay cheque.

Please note: Your host organization must pay you as an employee (using a W-2 tax form) and not as an independent contractor (using a 1099 tax form). Please contact your visa sponsor if you are being paid as an independent contractor.

How Taxes Work

As a foreign visitor receiving paid training on a J-1 visa, you are required to pay some (but not all) of the same taxes U.S. citizens pay. Roughly 10% to 15% of your salary will be withheld for federal income tax.

Some states and cities also charge income tax, which would be an additional 5% to 8%. While your host organization should withhold the correct taxes, it is wise to review your first pay check to make sure there are no errors and the tax withholding is correct.

What you must pay:

· Federal income tax

· State income tax (if applicable)

· Local or city income tax (if applicable)

What you do not have to pay:

· Social Security and Medicare tax (FICA)

· Federal unemployment tax (FUTA)

Filing Tax Returns

At the end of the year, you will be required to file a tax return – which is due April 15, unless the 15th falls on a holiday or weekend, in which case your tax return will be due a day or two later.

You may be eligible to claim a refund for a portion of the taxes you have paid. Failure to file a return and/or pay taxes may prohibit you from returning to the U.S. in the future.

Please note: Unpaid participants must also file tax forms. If your position is unpaid, there is no tax due. However, participants must still file tax Form 8843. Visit Internal Revenue Service | An official website of the United States government (irs.gov)  for details.

For questions regarding tax status or withholding, please consult a tax professional familiar with J-1 program and U.S. tax law.

There are 2 ways to file your tax return:

1.Complete and file your own tax return  

To complete and file your own tax return, you will need the following:

• W-2 form You will receive this from your host organization soon after the calendar year ends. Contact your host organization if you do not receive it by January 31.
• 1040NR-EZ form Your federal tax return. You can download the form and instructions at irs.gov.
• State/local income tax forms These forms are different for each state. You can find more information at irs.gov.

2. Use a company to file the tax returns on your behalf 

There are many companies that provide tax filing services. Carefully check any provider’s credentials to make sure he or she will file your returns properly

Cost of Living

It’s important not to underestimate the true cost of living, which includes rent, food, transportation, entertainment, and other expenses. It is also important to note that many internships and training programs take place in major American cities such as New York, Chicago, Washington, D.C., and San Francisco, where the cost of living can be much higher than in rural areas.

Cost of Living Comparisons, 2023 data. (expatistan.com)  is a useful tool that can help you compare the current cost of living in different U.S. cities to the cost of living in your home country.

Also consider your lifestyle, what do you enjoy, do you hope to join a Team, Club or Gym? Be sure to factor these in and research before you depart. 

Budgeting

Setting a budget in place before you depart for the first few weeks to ensure you have enough funds to support yourself. 

There is no set budget USIT recommends as everyone is different, with different circumstances and different lifestyle choices etc. Therefore, we have some tips and things to take in to consideration when planning.  

Consider the following when planning your initial budget:

• Your accommodation may ask for your first and last month’s rent up front, or a security deposit as well as first months rent up front. 
• Your accommodation may come unfurnished. 
• What bills will you pay?
• Do you have to pay extra for laundry? 
• Memberships e.g. Gym, Clubs, Netflix, Disney Plus, etc.
• Bank charges from your Irish bank may still build up. 
• Transport costs.

Consider your first shopping trip may cost more when you first arrive including items such as:

• Groceries and personal care.
• Duvet, pillow, bed clothes.
• American phone charger/ Laptop charger if needed.
• American sim card.

Review your budget often and adjust based on your internship salary once secured. 

Make sure to budget for your travel time at the end of your internship!