I'm being offered a postdoc position at Penn State University.
The recent rise in salary sounds good (about 4000$/month), but I wonder taxes may be not included. Any help?
You will be taxed like any other employee in the US, unless you are in the US temporarily and the US has alternative tax arrangements with your home country (see below). Salary is always reported in pre-tax terms. Your actual take-home pay will depend on deductions for things like healthcare, and the taxes in your state. At the new annual ~$47k level for postdocs, you can expect this to be in the vicinity of $2800-$3000/month, depending on your marital status, dependents, etc.
It's possible that if your home country has a particular tax treaty (link to IRS) with the United States your tax situation may be different. If this is the case, you may want to adjust your tax withholding accordingly, though you may also owe taxes to your home country. If you have taxes withheld that you do not actually need to pay, you can get them back when you file a tax return at the end of the year (typically in February-April), but you are essentially giving the US government an interest-free loan.
The institution you work for should have some resources and can help you with sorting out your tax situation. Local/state laws, countries of origin, your visa type, etc. can all influence your tax situation. The information I provide here is a guideline to know what your approximate income will be to help you make decisions about housing, etc before you start a position, but you should always study or get guidance on the particulars of your tax situation to avoid needing to correct things in the future.
I am a postdoc at a major research university in the US. Unfortunately, taxes can be quite complicated for postdocs. The answer is very different between fields (biomedical science, engineering, ..) and institutions. My experience is in biomedical science.
You definitely will owe taxes, and they will definitely be owed out of the amount they are quoting you ($4K/mo. or whatever).
You should call your employer and ask these questions:
Most American employees receive a W-2. Many postdocs receive a 1099-MISC, especially (but not exclusively) those on individual fellowships.
If you receive a W-2, then the answer is very very simple (congrats!). You are receiving normal earned income and you can pay taxes just like any normal employee using the normal forms. Receiving a W-2 also entitles you to employee benefits (such as being allowed to have a retirement plan, commuting benefits, etc.).
However, receiving a 1099-MISC means that your income is not considered "earned income". You are considered more of a contractor (like a house painter) than an employee. Employers do this because they don't have to pay your Social Security or FICA tax, so it saves them money. Unfortunately, it is sort of a gray area whether the postdoc is supposed to pay these taxes either.
You have two options: Option 1: Declare yourself a "self-employed contractor". This means that you will pay a special self-employment tax to cover your Social Security tax. It also entitles you to deduct many living expenses as business expenses. This can save you money but will be a lot of paperwork.
Option 2: Pay your taxes as if the 1099-MISC income were normal income on a W-2. It's a bit of gray area because the income is simply marked as "other/miscellaneous" on the form, leaving it unclear as to whether the university considers you self-employed or not.
Probably one of these options is correct and the other is incorrect, but it is currently unclear to me which is which. Your institution may offer tax advice sessions to clarify this. My institution told me that they cannot tell me either way because they do not offer tax advice.
It is not unusual for postdocs to owe taxes on the cost of your health insurance, even if your institution pays for this insurance. The cost of your health insurance would be added to your tax form. This is sometimes called "imputed income".
This is a very unusual situation in non-academic industries so this can be a bit of a surprise for many people.
If the answer is yes, then your life is a bit easier, because the institution will guess at how much taxes you will owe and pay about this much to the government out of every paycheck. Then at the end of the year, you file a return to correct for any over- or under-payment.
If the answer is no, then you must estimate how much you think you will owe and pay your own estimated taxes. These are due quarterly (approximately every three months). You still file a return at the end of the year to correct for any over- or under-payment.
Being a postdoc is such a weird job category that almost nobody (including accountants) will know any of this, unless they have specific experience with academia. So don't be surprised if they are confused too!
By far the easiest scenario is if your institution pays you as a normal employee, in which case you will receive a W-2, they will withhold, and you will not owe taxes on your health insurance. I hope this is the case for you.
Check your visa status first. Your visa, your country and the time you spent in US will determine what regulations are applied to you. I strongly recommend to check the international student office of your university as they generally have new tax information and they generally organize free consultation to students (undergrad, grad) and postdocs for tax forms.
Do not take automatically the advise of your American colleagues , as their situation is most probably very different from yours. Average people have no idea about the notion residency for tax purposes, and give you incorrect advice in spite of their goodwill. Most accounts has no idea about applying rules neither, as few foreign postdoc has money to pay them.
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