Figuring Your Monthly Expenses

Banking

Credit Card

Income Tax Information

• Social Security Tax
• Other Taxes

FIGURING YOUR MONTHLY EXPENSES

You will need money on hand to meet your first month's expenses.  We recommend that you use a credit/debit card or travelers checks rather than carry large amounts of cash.  Listed below are some major expenses you will most likely have soon after your arrival.

If you are on the UT Southwestern payroll, you will be paid once per month.  If you begin employment before the middle of the month, you will in all likelihood receive your paycheck on the first working day of the following month.  However, if you begin after the middle of the month, you may not receive a paycheck until the second or third week of the following month.  Please plan accordingly.

Estimates of Your First Month's Expenses in the U.S.

BANKING

There are numerous banks in the Dallas area that offer checking accounts, but only a few offer free checking without a substantial minimum balance. Because account policies are subject to change, please call the bank for updated information.

A few of the larger banks in Dallas are:

            Credit Union of Texas (http://www.cuoftexas.org/)                 

            Chase Bank (http://www.chase.com/)

• • There is a branch location on campus at Exchange Park

  Bank of America (http://www.bankofamerica.com/)

• • There is an ATM located on the South Campus

            Wells Fargo Bank (http://www.wellsfargo.com/)

            Citibank (http://www.citibank.com)

You will need to present identification when opening an account, which may include your passport, immigration documents or offer letter verifying your employment, social security number, and Texas driver's license or ID card. Your bank may also want to call the International Office for employment verification.  If you would like to transfer funds to a Dallas bank prior to your arrival, please contact the bank for specific instructions. IMPORTANT!  Any check you bring with you to open a bank account, including a cashier's check, may take ten (10) days or more to clear through most Dallas banks.

CREDIT CARD

Buying on credit is a popular way to pay for large purchases in the U.S. Credit enables the user to buy items and extend payment over a period of time.  However, in addition to paying back the value of the purchase, you will also be required to pay an interest charge; in some cases, this interest charge can be as high as 18 to 24 percent per year.  You should be very careful not to overextend yourself when buying on credit.

Although in theory anyone can apply for credit cards, major companies like American Express, Mastercard, and Visa only issue them to individuals who are able to provide proof of substantial annual income and a credit history in the U.S.  To establish credit, you must first buy something on credit and pay for it over several months.  Some banks have "Secured Credit Cards" which allow you to establish credit using your own money as the balance. Applying for a credit card at the same bank where you have a savings and/or checking account may also be helpful.

IMPORTANT!  Many of our foreign visitors have found it helpful and more convenient to obtain an international credit card in their home country, where they have already established credit.

The following website gives valuable information regarding strategies for obtaining a credit card or establishing a credit history in the USA.

http://www.istudentcity.com/feature/1005_ccards2.asp

This following website allows you to search to find the best rates for various American credit card companies.

http://www.creditcardassist.com/student/creditcards.html?gclid=CKiY87nBxYECFQuDOAodiAk1mw

INCOME TAX INFORMATION

Income tax returns must be filed by April 15 for U.S. based income earned the previous calendar year (i.e., April 15, 2007 is the filing deadline for 2006 income tax returns.).  If all your income is paid directly to you by a source outside the U.S., you must file an income tax return by June 15.  During your first two (2) years in the U.S., you will only pay taxes on the portion of your income paid to you by a U.S. source.  The tax you pay is in proportion to the amount of U.S. income you earn.  The amount of taxes withheld is not always accurate, so filing a tax return allows for adjustments.  Ultimately, you will either owe the government money, or be entitled to a refund . The federal agency responsible for taxation is the Internal Revenue Service (IRS).  Non-resident aliens file Form 1040NR OR 1040NR-EZ. The CINTAX On-line Tax Preparation Program is available for use to all UT Southwestern employees and visa holders of that tax year. The International Office receives and distributes the access code from February through April to assist in tax preparation.  Any Instruction booklets and other informational materials can be downloaded from the Internal Revenue Service (IRS) website. Please understand that the International Office does not provide tax advice of any kind.  All we can provide are resource materials and basic information on filing procedures.

If you are paid by UTSW, you will complete Form W-4 for withholding of taxes shortly after you start work.  If there is a tax treaty between the U.S. and your home country, you will be given the forms needed to claim a tax exemption.  An exemption from income tax withholding based on a tax treaty is limited.  You may contact your embassy or consulate in the U.S. for a copy of the tax treaty that applies to you.

In some cases you may require the services of a tax professional.  Representative at the local IRS office are available to assist you.  In addition, Certified Public Accountants (CPAs) may be retained for a fee to advise you and complete your tax returns.  While many may be eager to help you, they may not realize how complex tax laws are for non-U.S. residents.  You may want to interview several CPAs, as well as ask other visitors for their recommendations, before you hire one.  Please remember that regardless of who prepares your tax return, you are responsible for its contents. You will incur the cost of any penalties for mistakes and the resulting late fees.

SOCIAL SECURITY TAX

Non-Residents for Tax Purposes are usually exempt from social security tax for the first 2 calendar years.  During the third year in the United States, you may be deemed a resident for tax purposes, at which time you will become subject to Social Security .  Please refer to Tax Publication 519 - U.S. Tax Guide for Aliens for more information.  Some countries, such as Canada, have bilateral agreements with the U.S. which exempt a visitor from paying a social security tax in this country if they already pay one there.  (see Tax Publication 519 - U.S. Tax Guide for Aliens).

OTHER TAXES

Texas does not have a state income tax and Dallas does not impose payroll or income taxes.  An 8.25% sales tax, which is a combination of city (1%), busing (1%) and state sales taxes (6.25%), applies to most retail purchases, except groceries and medicine.