Opening a bank account
Follow the below steps to open a checking account where you can deposit checks:
Ask your employer if there is a bank they recommend, or just choose one that is convenient.
- Go into the branch and ask how to open a checking account, particularly:
- What documents must I bring to open the account?
- Must I keep a minimum amount of money in the account?
- What fees will I be charged?
- What is the penalty if I withdraw more money than I have, either at an ATM, with a check or with a credit/debit card?
Some employers do "direct deposit," where instead of handing you a paper check, they deposit the money straight into your bank account. This will mean that you can access your money faster, and don't have to worry about losing a check. You will receive a paper receipt every time money is deposited. This also makes it easy for your employer to deposit any money that you still are owed after you have finished working there.
If you must cash a check before you have opened a bank account, you can do this at Walmart, or sometimes other grocery stores, for free. There are also places called "check cashing centers," but these charge a large fee and are not recommended.
Many checking accounts come with checks and with a credit/debit card. If you lose a checkbook or credit/debit card, call the bank immediately to cancel it, so that someone else can't use it to get money out of your account.
You must pay Federal income taxes, as well as State and Local taxes in some areas. Your employer will "withhold" taxes - this means they take money out of each check and sends it directly to the U.S. Government.
Typically, the amount the employer withholds is more than you actually owe. In the beginning of the year after your Work & Travel program, you will receive a W2 from your employer, which tells you how much you made, and how much you paid in taxes. You will use your W2 to file a tax refund with the U.S. government.
Be sure that your employer knows what mailing address they should use to send you your W2.
The U.S. tax refund system is very complicated, even for U.S. citizens. If you file your tax refund incorrectly, you may not get all the money you are owed, or you could even be charged a penalty. There are companies who specialize in helping Work & Travel participants with their tax refunds, such as www.taxback.com. They charge a fee of about 10%. We recommend that you choose one of these companies for assistance, or find an accountant that can help.
J-1 Work and Travel students do not need to pay Medicare, Social Security, or Federal Unemployment Tax (FUTA or FICA). If your employer asks for proof of this, direct them to our Employer Web Page or have them contact ERDT.
Frequently Asked Questions
My final paycheck and/or housing deposit refund check will not be ready until after I have returned home. What should I do?
Ask your employer if he/she will deposit the money in your bank account. If not, please contact your agent in your home country and ask what they recommend.
You can ask your employer to mail the check to ERDT, or to your home, but there can be extra fees for cashing or depositing a U.S. check outside of the U.S.