US Tax System Features and US Tax Explanation
My name is Holly Musselwhite. I am the clinical nurse educator for Connetics USA a company under AMN healthcare and today we're going to be talking about taxes in the USA. Not everybody's favorite topic but it is a really popular request that we receive from our nurses and other health care professionals that we work with, who are already here in the US who are getting ready to come to the US who are considering coming to the US. So this will have some great information. We have two great guests that are going to be sharing information with us today. And so I think it's going to be a really great show.
I'd like for you to introduce yourselves and tell us just a little bit about, you know, how you came to be in the US and what it is that you're going to be sharing with us today? Kaye, we'll start with you. All right good morning, everyone good evening good afternoon.
My name is Kaye I'm a nurse, operating room nurse by profession. I arrived in the United States around 2006. And I was clueless, like everybody of you, you know, you just wait for your paycheck. And my experience here is I don't understand what I'm seeing in my pay stub because this is something new. And plus, I'm young that time and really you kind of like YOLO you only live once. So that's an pay attention. But then I realized that, you know, I think there is some disconnect here. Because I was doing a lot of overtime as a newcomer to the United States. And I don't see that find that my net home is really getting, you know, way ahead, because of the taxation, then I started realizing that taxation is very important to understand if you really want to, you know, succeed financially in your life, you know, because it's part of the top part of your expenses. And you have to understand what goes around it. So here I am, after learning that. I used it in my travel nursing, and been traveled nursing for the past 17 years in the United States already. So here, and I also have a business as well in the United States. After learning all this.
That's awesome Kaye, we're looking forward to hearing more about your experience. And I'm sure you have a wealth of knowledge. And if you've been traveling, you've probably experienced some different states and the state taxes that come along, not just the federal taxes. So we'll move on Madel, can you tell us a little bit about yourself?
I'm Madel Baroma. I'm from Texas we moved from Washington State during the pandemic. So I we lived in Washington state for about 10 years and then moved here. My background is I'm a doctor in physical therapy. I am currently a Program Manager with a big rehab company and at the same time, but that's my part time okay. And but my full time is I'm a licensed financial professional in a in a big book broker firm. And I've been in this industry for about six years. So we came to the US 2010 Of course knew nothing about the country first time to write in a plane, never been to a plane only here coming to the US. And I have three kids. For some reason, Uncle Sam was favorable to my end because of my three kids. And it really helped us, alas, boost a lot of savings because of a tax refund. But of course, I'm like you guys, I'm also confused about the taxation system. Here in the US, I have a lot of mistakes as well in the past, because I don't understand my w two, my W four and all these tax forms. That's why I became so passionate that teaching this this topic because me myself, I was like, Oh, my goodness, if I see myself with others experiencing the same Oh, I wish I could help them right so for today, we're going to be talking a lot about taxes.
You know, what's IRS? How is the tax system here in the US? And what are basically what nurses are being taxed on? You know, terminologies like federal tax, credit tax refunds, tax rebates, and other stuff. And of course, we will go over the documents when you're starting a job as an employee, and of course, filing taxes is the best, the most fun part of it. Thank you, Holly.
Thank you, Madel. So, I think we're gonna get started with what you just mentioned, which is what is the IRS? So some people are starting very basic, and they hear this term, and they hear the W twos, and w fours and all that stuff, and we will get to those details. But let's just start with the basics what is the IRS? I'm not sure if my slides I'll go I guess I have okay. I shared a different slide, but that's okay. I'll go over this one. So of course, IRS is a revenue service for the United States, federal government, and they're responsible for collecting taxes. And it is administered by, you know, certain IRS code, and which is the main body of the federal statutory tax law. First time they felt like IRS is like a scary government agency. But I tell you like what, like what Kay had mentioned a while ago, if you knew how this taxes work, you know, IRS could be on our side, you know? And, of course, if I'm giving you a little bit overview of the US tax system, give me a second.
So I don't know if you have slides on that one. The US tax system is set up on both the federal and the state level, and federal tax and state taxes are completely separate. And each has its own authority to charge taxes, the federal government doesn't have the right to interfere with the State Taxation, and each state has its own tax system that is separate from the other states. And then besides that, within the other state, there may be several jurisdictions that also charge that also, like impose, I would say, charge taxes. And this charge taxes could be either counties or towns that may charge further, for example, their own school taxes that are in addition to the state tax. Okay now what is at nurse tax on okay nurse tax on to what we call the income tax, okay? The income tax is one of the most well known forms of taxation. If any of you earn in the US, or any income in the US, you will see the deductions on your paycheck.
Whenever before I thought, when I first came to the US, I thought this is my rate, while I'm doing all my math and everything. And then suddenly, when I got my first paycheck, you know, this shouldn't be the calculation. So I started calling my HR and questioning and I think about all these deductions, I felt so dumb and stupid for not knowing but of course, but of course, you know, it's my first time and I was, you know, it's, it's normal to be questioning all these deductions, because, of course, in the Philippines, we don't we're not familiar with those kinds of deduction. And every person who earns income in the US is supposed to pay income tax on both the federal and state level. Federal taxes includes your Social Security and the FICA. And each state also has its own form of income tax that employers also withhold from your paycheck. So looking at on the screen, as we mentioned, I mentioned about the federal tax which is a tax that you pay to the national government as a Of course, it's your tax base on what you earn, what you buy, things you own. And then now this is one even when we die or tax, okay, because of the estate and inheritance taxes. So as you can see in your screen, then those are awhile ago, those are your individual taxes based on those category. Okay. Also on top of that the federal tax is the money that individuals and businesses pay to the US government based on income and profits. And to my to be mindful that the individual income tax has seven tax rates that rise with income, and each rates applies only to income in a specific range ranging from 10% to 37%. If you can see as well, if you want, okay, there you go. Thank you for sharing that slide next slide, please so this is I'm just showing you briefly, this is the 2023 tax bracket, this is for a single filer.
So you can see each bracket falls, it depends on what you make. And that will be the amount that you owe, we're not going to tackle about how to compute this, but at least that's a very basic that you can just Google it. Next slide, please. Same for our married filing jointly. So that's the bracket. Next, please. And then married filing separately and then of course, head of household, the last slide. So you can just take a screenshot, you know, you know, your status right now of course we're single you're single, married, it's either you file separately or you file jointly now how what to determine and how to determine if I'm gonna file separately, or file jointly. So the best person to ask the best resource person is, of course, your CPA, but it's a case to case basis, while why couples file separately, and of course, and then majority also, of course, file jointly. But of course, if you have a certain goal, especially when buying a house, sometimes they do the separately but consult with your CPA on that one. By the way, on this slide, you will see these are the current state tax rates by state. So you can see, okay, for example, if I'm looking at California, so the tax rates range from 1% to 12.3%. And it's based on the lowest and the highest tax bracket. And you can also see states here that doesn't have a wedding mean does have flat rates. So it doesn't matter how much you make. They have the flat rate like Indiana has a flat rate of three point 15%. Illinois has four point 95 and you could also see other states that doesn't have state tax.
So I'll start with Alaska, Florida next slide, please and Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming. So for those of you you're trying to move to different state, some of them they have a state tax is a big factor why they're relocating to a new state. So let for us in Washington state, and we were in Washington State, we did not experience state tax. So we, but then why did we move to Texas? Well, of course, there's no state tax, but then whether West Washington is raining, you know, it's cold. And so And of course, there's a lot of opportunities for my husband here in in Texas. So that's one factor as well. So let's move on to the slide for the tax credit. If you can pull that out for me. So thank you. And what do we mean by tax credits? So tax credit is an amount of money that taxpayers are permitted to sub to subtract dollar per dollar from the income tax that they owe. And tax credits are more favorable than tax deductions because they actually reduce the tax to not just the amount of taxable income. So examples of tax credits is your family and dependent credits if you've got kids, which I will discuss a little bit about child tax credit. If you have P&l, like Tesla or those electric clean vehicle credits, that's what we call that. income and savings credit, a home owner and health care credits.
Just a quick question so on these credits, are these credits always there or might they change from year to year what you might be eligible for? Will it still is always IRS always post announcements anyway. So we just have to be on top of it or your CPA will update you anyway. But so far through the years, I've been since I came to the US, I've been getting the family independent credits, I get the homeowner credits, because of and then of course, the healthcare credits. So it is still there, but the one that that may change will be the amount of credit. Yeah, that makes sense like what I said a while ago, I have three kids. That's why Uncle Sam was very, very favorable with me. So my kids came when they were very young. So my youngest was two, my eldest was six. So imagine how many years folly that I enjoyed. I enjoy the child tax credit. But now my eldest is 21. And my son is 18 and my youngest is 1 my goodness you know, that works. Right? Yeah benefit now I was joking with my husband, maybe we need another baby. I mean, what the other thing is, I've been on the other side of that, and my grandmother was my dependent for a while. So when I filed my taxes, my dependent wasn't a child, it was an older adult, and there was some tax benefit to including her in in that filing as well. Yes, that so called the dependent credit. So, but I'm gonna highlight at the Child Tax Credit here but yes, do we have a lot of credits, there's a child tax credit as of now as per the IRS, they had it's only you know it only marked the 2022 Child Tax Credit which still if you have young children, they will provide $2,000 for each dependent child, as long as they have a social security number younger than 17 at the end of 2022. And then, but the 2000 per child amount begins to phase out an income of 200,000 for single tax filers and 400,000 for married couples filing jointly. Okay, so it's still like what you mentioned a while ago, holy, would this be subject to change? For now with this one as yes it's still if you make more than a if you make those income and more than that it's going to phase out on you. And like what you said a while ago about the dependents you just list them when you file your taxes. And then of course, just put their social security numbers on what we call form 1040. And you have to complete a what we call a schedule 8812 which is called the credits for qualifying children and other dependents. So make sure when you file your taxes, of course, your CPA will prepare all those forms anyway. But it's good to know these forms, right? And then like, what if our dependents are already above age 17. And they're still living with us. So if you have children or other dependents who are 17 or older at the end of 2022, you can get 500 credit for each of them. And of course, this should be put on the forum schedule 8812, online six to eight. So that would be that would be something as good to know.
Okay, and then I could go over the next one, which is the tax rebate. So if that's like can be pulled out. So besides the tax credit, there's also what we call tax rebate, right? So in a tax relief rebate is a refund of tax when the tax liability is less than the taxes paid by an individual or business. And tax rebates can be issued by federal, state or local government for various reasons. Such as stimulating the economy encouraging certain types of purchases, or reducing tax burdens on low income earners. Examples of these are the recovery rebate credit, you know when we had the economy downturn 2008 Because of the housing bubble and the during the pandemic. So that's an example of a recovery rebate credit. You also have the alternative energy tax rebate. So like for us we have our house we have a solar panel, so that's a credit. And then of course, if you have a hybrid car, like Tesla or Toyota Prius, so that's a tax rebate.
Okay, Madel take a breath you've got great information. And I appreciate that, but we're gonna give you a break for just a second. Kaye, I actually want to bring you in and ask you, have you experienced any of these rebates? It's credits that Madel has been sharing with us and did you figure that out from talking with a tax professional? Or did you figure that out from doing research? Like, how did you learn about the tax system?
Like every one here in the United States I mean, every nurse in the United States from me it came to a point that I said we're the most hard working people on Earth. But how come majority of the nursing profession professionals are paycheck to paycheck? No, I was doing a lot of overtime but I feel like I'm not getting ahead financially. So that's when I realized like there is something wrong or something that I'm missing. So that's the time I started learning about finance. And I grab a book, you know, it was the most basic book that I have ever read for about finance called finance for Dummies, because I really thought I was a dumb I let I have to accept it. And you know the first thing for changing your life is really accepting that you are missing or lacking something in knowledge. So that's the one thing I got. And it really helped me a lot, because he went through the personal finance as well as taxation, that basic taxation. And then I realized, wait a minute, I did not even use, you know, those things that Madel has mentioned those tax credits, those tax, you know, what are the tax advantage? You know, retirement plans, like the ones being offered, that's my work during that time is the 40 140 1k provided that I was also working in a government institution, they also provided a on top of those are the 457, or five, seven plan for federal is called tsp. So you get two options in your retirement there. But I still don't know I don't understand those things. But you know when I started so as soon as I started reading I started listening to podcast I actually really became a sponge. And understand that Wait a minute. Well taxation is bad day said if you do a lot of overtime, you get taxed a lot, though. So there's a lot of this myth that's happening and going around the nurses that don't do overtime, you know, it's just gonna go to Uncle Sam, but I'm like looking at it.
Well if you're gonna tell me three, receive $100,000 more of my salary will I say no to that just because of taxes. And I realize it's not really avoiding those topics it's really you have to understand those topics too. Like Madel said take advantage of on your end so I did receive tax credits as well. For my electric vehicle. With I, there's two levels of tax credit, actually where I am in Maryland, so you get the federal tax credit, and you also get the state tax credit. So I think the tax credit for federal is 7000 something and the state level was around 4000, where I am so just that 11,000 If I didn't know that I wouldn't even take advantage of it. But I actually, one thing that I've learned about using a tax professional is when the first time I used somebody else who wasn't tax pro somebody just would he said that he said tax preparer and all the shebang. So it was referred to me without really researching that professional. And I actually ended up getting audited. And when that audit happened, that person said you know answer it by yourself. I'm like, Oh, you told me you're going to help me. So I learned my lesson to always, you know, be proactive and understanding what are what are these things that muddle mentioned the forms, you know, because if if those were filed incorrectly, you're the one who's going to suffer. And you might be paying fees as well, I had to pay like close to 4000 for that, because I don't know, and I don't understand. And from that moment, I said to myself, no one will really act on the best interest for yourself except you. So you better learn it, at least the basics. And when you learn it, you will take advantage of those tax credits. I also have my mom as my dependent.
And I also have two kids, which we also use as a, you know, for tax credits for kids. Later on in my life, I went beyond the limit of the income. That's where in the business comes in, because there is a lot of tax deductions and tax breaks for businesses as well. As I want to add to that, too, with Kaye because through the years that I become a licensed financial professional, so I get in touch with a lot of nurses. So especially new immigrant nurses at first they're enjoying you know, whatever tax refund they have, right because they didn't realize when they came to the US they probably came middle of the year and their income is not you know, it's within a certain lower tax bracket, so they're enjoying their tax refund. And then even though you know at times I educate them hey you have to be you know of course, if you really want to maximize that and also be proactive, if you're going to be paying taxes or not down the down the road especially, you will be exposed to a lot of overtime opportunities because that's the way it is, right? So yes, but because, you know, like, what, what Ken had mentioned, knowledge and education is very, very powerful. So you can be proactively plan ahead. It's not really like if the call of duty asks you to do overtime, you don't have a choice.
But you also you don't want to be upset as well while you're paying a lot of taxes. It's just how you're able to manage this by of course, having it's either you read books or consult to your CPA, because your CPA would know more about how to help you. I would also like to suggest a book as Kay had mentioned, because when she started ramping up her income, she started a business which I did the same. So I there's one great book, lower your taxes by Sandy Botkin. I read that, you know, front to back twice. And I truly appreciate and appreciate that book. So also last one for the tax credit, child tax credit, I forgot to say for those new immigrants that come to the US you might be wondering you know, IRS did not acknowledge my dependents, they were here to have social security and they you know all this stuff you have to be on your first year, they have to live with you more than half of the year at least seven months six to seven at least seven months to be safe. So you could be able to claim them only on the first year. Okay but the following year you should be okay got it I think the other thing that I first of all thanks for the book suggestion because I'm going to read that one. I have almost from the beginning of my experience paying taxes. I also wanted to hire a professional. I know there are some people who will buy those online programs or even the free ones that are out there. And they ask you a lot of questions to try and prompt you to see where those benefits may be to your filing. But there's people who you know, they have a little home office and they're doing you know, like case first experience they say all I'll do it for you and you kind of have a sense of relief, but it is good to if you're going to hire someone do your research and make sure that they have the right credentials, and they are going to be in your corner.
What happens though? And I don't know okay, if you experienced this or not what happens if you file your taxes and you realize like maybe a year later that there's something that you missed that was big? And can you like can you fix it? Or are you stuck and whatever you whatever you did, you're now out of that money or out of that potential savings? Great question Holly right because I really experienced it as a traveling nurse I've been everywhere and I did not realize some state actually impose taxes just by owning a car. So when I registered in Connecticut, I did not realize that I have to pay taxes like every year like how houses are so it's like cert I think there's only three states if I'm not mistaken, like around three states in the US that you will have to pay taxes on the car like how you do pay taxes on your house like a property taxes being paid every year this state said you have to pay taxes on the car and the taxes is based from the type of car that you own. So if you own a luxury car your taxes is very high so we did not realize that for three years we didn't we're not paying through the three years we're not paying Connecticut taxes on auto and at the tax that we had there was $800 a year and after five years we actually got an mail a mail while we're outside Connecticut that hey, we gotta get your account was sent by the by the by the city for collections of taxes that you did not pay and incurred interest and it occurred penalty as well. And I'm like, I have no idea about that. But he said you know you can settle this now or you want to do installment payments. So what you will have to do if you miss something. First you gonna have to ask your tax professional. If the tax is a tax professional say hey, you cannot go around with it.
You just have to pay it. You just call the collections or the city will who send you that bill tax. And you can fix it you know you can fix it and talk to them and settle it our account did not go on collections, we did not get any bad credit history. As soon as you get those notice you have to respond as quick as possible. Don't ignore it, but it's fixable and don't be scared because they understand that a lot of people move around. And nobody knows this, you know, auto tax as soon as you get there in that you state and there's not only auto taxes. So in other states, there's also like city tax, county tax that is not being done in other states. So it's your responsibility to sit down with a tax professional when you have plans to moving around so that's my recommendation. Absolutely know what you're getting into my Dell, we have a request from one of the folks watching to please repeat the name of the book and the author that you mentioned. Lower your taxes, well lower your taxes big time there's a big time because there are a lot of lower taxes book, lower taxes, big time by Sandy Botkin he mainly talks there about besides your earned income as an employee, you also have to look at a side hustle. If you're having a hard time to lower your taxable income because your income is so big you do a lot of overtime. So think about a side hustle that could lower your taxable income because you can really like take advantage of almost your daily expenses as a right have they said that it's mentioned in the book too. And can I share a little bit Holly about an experience.
So with what Kaye mentioned, I knew a friend that was audited with IRS because she didn't know about the 1099 form. Because all she knew was the only form to file in taxes w two she series is it's her first year in the US she didn't know so seriously, but 1010 99 from her other job. And for some reason, she didn't file it. And then she got a paperwork from IRS like an audit. And she had to pay IRS back 20,000 She was so devastated. She didn't know it. Right. So she had to work with a CPA, and then and went into a payment program. But like what I said, those simple forms don't neglect when they come to your mail, around February, March take them all any tax form with you know, numbers, get them and take them to your tax professional, so that they can review it for you. So Kaye, did you get some credits or rebates last year when you filed for 2021? Yeah, 2022 It'll be funny because I actually have not filed my 2022 tax so this week, actually, I'm preparing because majority of the business people, we tend to extend our tax filing so if we extend beyond April 15. So we have October 15 as our deadline for tax filing. So actually my tax professional, my CPA is actually waiting for me and end of this week by Saturday. So when I did not know about all of this taxation, I would always be excited for refund. But then when I learned more about business, and the advantage of 3d Understanding taxation I would say I'm not as excited before anymore when I get refund, majority of the time, I know I would be. So there are, there are actually calculators that are available online that you can use to estimate how much you're going to be paying in taxes.
So like, for example, I primarily use smart assets for my w two. So those are good example for business. I also, you know, run it by QuickBooks, those are the apps for business that we use. So it will give me around how much I'm going to pay by the end of the year. But I save that money throughout the year anyway. So at the end of the year in the tax, the tax professional will say hey, you owe this and then you're gonna pay it. It was funny one time, because I was just trying my pride myself, you know, using the software of, you know, available software online, and I said, Oh, I'm gonna pay $40,000 You know, at the end of the year, which is fine, because I have not, you know, paid that taxes. I know, I owe Uncle Sam and I know I will have to pay him at the end of the year. But then I said, you know, I'm not gonna file this here yet. I what I'm gonna do is I'm gonna give it to a CPA. He was quite expensive. But he was very, very experienced and knowledgeable. He had 30 plus years in the field, and doing very great business, accounting, so I gave it to him, and then he called me said, Kay, you owe $12,000 I'm like, wait, what? I thought it was gonna pay 40,000 wasn't said, no, no, no, you probably missed some things in here, you know, thinking that, hey, I think I can use this software. I'm knowledgeable, actually, I'm not yet. So those are the things that I would say, I invested in paying a professional. And in return, I actually saved more. So that's when that thing clicked in my head. Well, this professionals are actually investments. Yes. So even if I paid $1,000, for him, he saved me more than 20 bucks $20,000. And now we have money for our vacation.
Yes so it's definitely helpful just like you're not gonna go to a nurse to file your taxes most of the time. No, and there are some of us out there I mean, Madel you're a healthcare professional, and you and you have a side hustle that or maybe that's your side hustle. But you're doing blending your healthcare knowledge and your financial expertise. And that's awesome just enough to be dangerous. So I think we've talked a lot about the different credits and refunds and things like that, but just want to recap. So we have taxes that will get automatically taken out of our paychecks. Sometimes they're from the federal government and a state government that may be pulling taxes out, we also may, when we file our taxes, which is on an annual basis or it should be we may receive money back or we may have to send additional money depending on our situation. And we may also have some other taxes besides what's going on with our paycheck and our annual filings. Like when we go to the store, and we buy new clothes, there may be taxes on that purchase. And that's at a state level, usually, although it may vary county to county. So we have taxes kind of coming out in a lot of different ways. But it does help I think, Kaye, you made the point earlier if you get here and Madel you did too. You get your first paycheck, and you're like wait a minute where's my money? And those automatic things that are happening are why one of the reasons why you always want to be looking at your pay stubs. So don't just you know I got a deposit there's money in the bank I'm good look at what's coming out know what's coming out. And also let's move on to talk about the forms that people are going to fill out that may impact what comes out and when. So when nurses start a job what tax document are they going to be filling out? With their employer they're going to give it to their employer they're going to fill something out what do we call that.
So it's called W four. So during onboarding, when the HR will call you, they're gonna give you a form either by paper or by digital. So it's called W four. So majority of the income in regular employee, you will have W four, when you fill up at the beginning of your job, and not the end of the year, they will give the employer will give you back a W two so again W four at the beginning of your employment so it's very straightforward. This is actually a revised edition, because prior to the tax overhaul by the former president, this is more complicated. But now you guys are lucky, this is easier to fill up. So the top form you can see there the top four columns versus step one this is usually the basic things that you will that you will apply or fill up. And then on the bottom, if you just have like multiple jobs spouses who works, you know, this is just for Uncle Sam, to kind of real enough to kind of estimate how much is the with holding, that's going to happen from your paycheck. And then usually majority of the people who reach out to me single people married and the house stays at home. Usually they fill up the step one and and then they go to you know, if they have kids, step three dependents and then signature. So it's very simple like compared to before there we have to compute stuff and 12345 stuff like that. So this is the most I think the easiest form in the past 18 years that I've been here in the United States that that this form was so easy to fill up. Because again the tax overhaul in 2018 made everything easy for the W two income earners. But the business people are still different.
And Kaye I heard you say earlier, that you're kind of pulling money aside like for your business, knowing that you're going to have to pay some taxes later on. So we can't assume that everything that got taken out in our paycheck is all we owe that may depend on when we go to file annually, do we get some back? Do we have to send more in? So how did you have an idea of what you'd probably have to hold back?
Actually the software helped me those online tools. But example, if you are receiving a bonus, which a lot of I would say you know not a lot but some people who would you know start their job and you are expected to receive a signing bonus, or let's say those relocation bonuses or allowance, so some of those payment towards you might count as an income tax. And a lot of people, you know, if you go to the forum, a lot of people say, Oh, if you're receiving 5000 Bonus you're only to receive half of that, right? Because after the tax is what happens really, there is Uncle some kind of like things that that you this is your salary for the entire year which is not really so now your tax bracket base from that withholding goes up higher. But then at the end of the year you're gonna see through Uncle Sam, and you file your taxes together with your tax professional say Uncle Sam not really earned $5,000 every paycheck. So now, if you feel like you've overpaid, or over withheld on that base stub on that specific pay stub, you you might expect a refund from that you know on that right just on that, but you're talking you know but taxes is add well, so Uncle Sam still has to compute on the annual basis. But that's all you know, those are the most common things that I've observed with other people who's doing a lot of overtime and not withholding a lot you know, they're even though they have family they they put their lives in sync single earner or single person. And, and then Ashley did Uncle Sam thought that both her and him are dead spouses are working. So they're being computed like married but at the end of the year is they Uncle Sam, my husband actually only work half of the year or quarter of the year so so your expect some refund on those kinds of picture.
So when you were hired like did they ask you to fill this form out right away? Was it kind of scary to fill it out the first time?
Yeah, I'm very scared because I did not know those forms. It's very alien to me. So every single job that I apply for gave me those those forms and so all you have to do is you have questions, you just have to call the HR and their HR payroll. So they will be very helpful in guiding you fill up those forms, but it's still your responsibility to learn those things.
Yes, to add that k as well because I had few experiences last year for some reason because of the pandemic so they were surprised at the end of the year that there was actually no withhold tax tax from them. So what happened was whenever they fill out a W four there's not really like a deadline or something at times they're missed. So it's so important to get on top of it when they're missed they're missed because you guys are busy right and then at the end of the year and then you will leave Utah you have refunded the Sunday how come I don't have withholding it's blank there are situations that it's blank literally no withholding so you're gonna like be surprised why am I paying tax back and I even have this case I have three kids have this why am I paying tax back and we look at the paycheck there you go there was nothing withhold from you because the W four like I said there's no like a deadline to fill it out. It's your responsibility to check that that's filled out or not
Yeah, my dad that's a really great point so if it looks too good to be true, it probably is and we need to dig a little deeper so if you're like wow, we didn't have many taxes taken out that's not when you get to the end of the year you're gonna have a very nasty surprise when you go to file I want to add something Holly with Madel it is very important to follow with Madel said please take a look at your paycheck. I have worked you know with 40 agencies in the United States I have worked in different hospitals and I'm gonna tell you, nobody was perfect you know, in every single time that I had an assignment there will be always one payroll problem and payroll you know, this way when you call the payroll they will say you know you have to wait for one day or you know, you have to schedule or any questions for payroll related you press for because it payroll will always have a problem everywhere you go even if you land the best hospital in the United In states, there, there will be always a payroll issue. That's why you have to pay attention to your paycheck. And I always say this to them. It's not that that the employer is bad at it. Sometimes we're all human and payroll, payroll department are human. So they're also prone to some small problem. It's just depend on how big it is small problem, big problem. Most of the time, payroll problems can be resolved within 24 to 48 hours. So don't be panic don't be upset with your employer you know, nobody's perfect so always pay attention to your paycheck.
Yeah, that's a really good point I'm gonna stop with the questions for just a minute, give you two ladies a breather. Wow, we've got a lot of countries represented here today Rica's watching from the Philippines, Kim wants to know how to apply. Well, Kim we'll put that link up right now so you can go to ConneticsUSA.com/apply. And I think we've also put it in the comments there for you to grab that link. But just in case you wanted to see it on the screen, we have it up for you and thank you Kaye for putting you put a link in there too for this smartasset.com thanks for putting that in there. So I'll get back to some of our other countries that are represented here in just a minute. Don't forget, you can ask us questions too. So you can type those questions in the chat. We'll take a look at those. On the form I just want to recap, what's the difference between head of household single filings married filings? What does that? How does that really play out? So if I'm married, and somebody says, are you filing married jointly or married separate what is the difference?
So single is of course, single status and it's very easy so head of household, like, there are some that are single or single like single without kids and single with kids but they have different, they could be head of household, plus they have dependents married filing jointly, husband and wife, plain simple married filing separately, they prefer to file separately, and there are reasons why they have to file separately. One main reason is buying a first time homeowners, you know they're buying a first time house, or for some reason. So there are some because of like, they're technically separated, but they still choose to be married for tax reasons. So there are a lot of reasons why they do that. But basically, that's just the definition of those plain simple.
So if they're married filing separately then that means both spouses will file their own income tax return to the government, be that state federal, they will both have to send in their own paperwork. Yes, and they will also enjoy separate standard deduction. Right. So it's like a single and head of household. But I want to add to that to make sure as I have cases like this with most of the Educate for those first time, new immigrants, okay, this is always their issue when it comes to filing tax. Because like what Kay said human errors happen. Social Security as well can make errors, okay. So sometimes the names and last name doesn't match what is submitted to your employer to IRS and Social Security. That's why it's taking a lot of time to get their refund or process their tax. Make sure your Social Security information matches What submit the desire is? Yeah, that's a very important point. And that's why if you're using a tax professional, a lot of times they'll ask you verify this is the right address. This is the right spelling of your name. They want to make sure that those details are correct. How do you know when to file your taxes?
So it's all over the news or the, the bulletin board of your work, you know, you will see that if you're hanging out in the social media, you will see a lot of people who do not see who do you use for taxes. So it is a for taxes, right? So then that's your cue that pays tax filing season, a lot of people are looking for or shopping for our accountant or tax professional. So but actually April 15 is the deadline mostly for tax filing, unless you extend you know like, for me again I'm extending. So my deadline is October 15. But in general, you know if you are not if you are waiting for a refund if you're expecting to refund the sooner the better you know as soon as you receive your W four your employer will prepare that on around January, some very quick employers that you will receive that around end of January, some will receive around mid February. So as soon as you get those forms called W four as an employee as an employee, cool, you're tax accountant already, you want to submit that way ahead of April 15. Because closer to April 15. This tax preparers are very busy. So if you want if you're expecting a refund, you know, if you feel like you've overpaid your taxes throughout the year, it's best to do it ahead of time. Like as soon as you get your W two I mean, W four I'm getting my coffee so that'll be a two, as soon as you received that there are like, multiple copies. So you'll just give the entire thing to your tax preparer and you said, I'd like to file my annual taxes. And they said we'll take care of you and, and just wait for your refund on your direct deposit account. You may want to do that as soon as possible as soon as you receive it. Because again, if you need that money and you delay that and you want to file close to April 15 your CPA or your accountant or tax preparer might take longer because everybody's you know, cramming, we always have that thing as last minute thing. You don't want to wait that if you really want that money ahead of you ahead of your time so far ahead of time.
So Madel what other than the W two, what other documents should someone have with them when they go to file their taxes? So if you have 1099, that's one not only 1099 from an employer, but also where you save your money could be the bank stocks, if they if you realize your gain what does it mean by realize your gain you took the gain out from your stocks so that's a 1099 but their 1099 also have categories like 10 9980, which means interest, then 1099 mis-retirement. So there's a lot of 1099 besides that too you would also get like what we call like from when you have kids that goes to college for this is another form that you get from the school. So you follow that as well if you have at some tax forms when you make donations to charity. And then of course, if you get away with good 1095 C then five eight so what's the difference is that 1095 A is a marketplace when you buy when you get an insurance outside your employer. Well, again I'm not saying that you can get insurance outside your employer, there are again limitations on that 1095 C you get that from your employer. And of course if you've got if you got some capital gains, you know, of course too much to explain on this session. But when you sell a house, it depends on the timeframe if it's less than five years to get some capital gains. And there are more like what I said rule of thumb any tax forms you get from the mail bring it that's all.
I'm actually I'll add to that so that the documents when they come in the mail remember we said the employer one works usually starts arriving sometime in late January into February and if you don't have it by mid February, reach out to your employer and be like, I don't have my w two. But a lot of other documents including things that come from like your mortgage company, it will say tax document on the outside of the envelope when it's mailed to you. So it kind of helps you red flag let me keep this it may or may not be helpful for me when I'm going to file my federal taxes so we've kind of talked about what you're using professionals to help and all that kind of stuff and thank you Kaye you put some more helpful information in there so we appreciate. So the other thing is let's say that a nurse goes I know, it sounds good to hire a professional, but I want to do it on my own can they do it? Absolutely so I actually recommend those people like, with the simplest tax status, you're going to have to compare it like how in medicine is when you have simple illness, you don't go to surgeon but if you have simple illness, you can probably go with a primary care physician. So it's the same thing with taxation. If your taxation is very simple, you only have one employer, you only have one income, I think, and you're not on the high income level that you need complicated strategy, I think those software tools online TurboTax, I think those can be helpful, you know, because you only have a single income but if you have investments, that actually that you got some money back, those are complicated. So you might want to consider a tax professional. Again, if you just arrived here, let's say you started today October 29. And you're gonna have to file your taxes, because he worked from October to December. So you only have three months that you work and your taxes not complicated, because you only had one job and your spouse is at home, you know, and it might have credits, those might be able, those might be simple. But again, complicated comps, you need more complicated, more expert people to help you out.
So the more money you make, the more deductions you have, the more advanced investments, or the more questions if you just want to be like certain it does help to have a little more expertise on your side. And yes, it will cost you. But in the long run, like, Hey, you might save 20,000 or more dollars. So that vacation will be plan table alright so we do we're just about out of time here Madel, what would be one final piece of advice you'd give to folks as they think about what should they be focused on when they think about taxes? So I want them to feel comfortable about taxes. I just don't feel bad about it. Because I see it this way. That's why our country of course, United States have the best schools the best, you know, again, military or whatever, best, best in the world, right? That's where our taxes go. Because I can tell with my kids, they have the one of the best schools, right? So But then, of course, we just have to be mindful of if we have financial goals, like for example, we're saving for college, we're saving for retirement and everything. Of course, tax management and education is a very, are two important aspects when it comes to aligning ourselves with our financial goals. So besides reading books, always, always talk to your tax preparer, or your CPA and ask all questions as much as you can. And of course, like this, you know, Connetics is providing all you this resources about learning about taxes, take advantage of those. So education that's it.
Thanks, Madel. Kaye anything to add? So when you are choosing actually jobs a lot of people are not here in the United States, and are actually choosing where to go. So those plays taxes plays a big factor as well. So for me, like Madel said we were given five options to look to move to and then we chose here, where we are right now in Maryland. And what's the reason why we chose it here is because of the school system, like Madel also said, that school for her, it's very important, but for us, we also value the school system, because we have kids. So when we pay taxes, actually, I was surprised that we're I was, I mean, where I am right now, is more expensive in income taxes than where we were in Jersey Shore. I thought Jersey Shore was very expensive, but actually, when I moved here, we got hit by three levels of taxes. And indeed what I told my husband and we were comparing what the kids would want to go for school and they really like it here. The school system is great. And I said it's okay, we'll pay that taxes because we're getting it back anyway. Because of the those you know, those taxes pay for those public services, like, you know, the school system, the school district, you know, the kids come home with their own computer, free from school. So those are the things that actually we value the most So, when I was single New York City, Manhattan was very expensive with taxes right? So it helped me by talking with a professional tax preparer, that she said, Kay, you might want to consider contributing to your pre tax retirement because, you know, right now you're in the highest you want, you're in the location with high taxation, from federal, from state and from city taxes.
So I was getting hit by three taxes in New York City so I followed her advice. And I'm very happy because now there are moments in my life taxation is not high, because I'm moving around, I'm changing jobs, I got pregnant, I have family. So there will be instances in your life that will change your taxation will change throughout your stay in the United States a lot of people jump into COVID contracts during the 2020. I was one of it. My taxation during that time was very high. So what did I do with contribute to my use of CPA and strategize our taxes. So again, my piece of advice here is if you don't know what to do yet, I recommend you start reading about it, educate yourself, because you shouldn't be scared of taxes. Because if you know how to use those things, for your benefit, it was going to be very beneficial. That's great advice. It's kind of parallels what we know in healthcare which is if you're going to have to make an important healthcare decision. You want to have the information to make the best one for you and for your family. So it is about education I think that's a great way to close out the show. Thank you both for being here today and I will just pop up on the screen here our upcoming shows. I know I saw in the chat people asking about retrogression we have Immigration Q&A I want you to be there as you can hear the latest and ask your questions. We will have a focus show onwards and upwards October 6, October 13. We're going to showcase a healthcare facility Connetics works with called Northside in the state of Georgia. And we have already got some nurses. They're enjoying life in the US specifically with Northside and Georgia and we look forward to sharing more about that organization.
On that date we also have our Connetics College upcoming shows every Monday at 6am Pacific Standard Time. We alternate between NCLEX classes and English classes. So tune in if you've got one or both of those that you're working on. And obviously those are major milestones when it comes to getting your visa filed and progressing through the process. We do have several initiatives out there so we hope you'll take advantage of our free English scholarship if you're part of the Connetics USA nurses group, we have referral fees available for nurses within NCLEX up through the end of this year. So if you have a friend refer them go to our website ConneticsUsa.com/apply. And we'll have our podcast. we have a nurse aid program for direct hire as well. Thank you today for being on our onwards and upwards show and I hope the rest of your weekend goes well as we get ready to start. I know some of you are already at Friday night. So all the best onwards and upwards by everyone. Thank you very much