Tax is something that you need to take very seriously, and you have obligations that extend beyond what is in the US and what is in Australia (basically, you need to combine them).
Seeking professional advice, therefore, is potentially your best way forward. I have listed some accountants who have been passed through to me below, and if you have more, please do let me know!
One thing to note early is that Australian and US tax years operate on different cycles. Australia has a June 30 year-end, while the US has a December 31 year-end.
Payroll Tax
Federal income tax, Federal Social Security and Medicare tax, State income tax, and City income tax are withheld every pay-check.
Your employer approximates how much tax you will owe at the “end of the year” (the 15th of April or the next business day following it if the 15th is a weekend or holiday). They do this by pro-rating (working backward for how much time you’ve been working) your salary on a yearly basis to determine which income tax bracket you will fall in and remits this amount to the various levels of government who receive your payroll tax (e.g. City, State, and Federal).
In January and early February, you start receiving forms from your employer, a health insurance company, bank, share broker, and any other entity that gave you money over the past year. Keep these handy. You’ll need them when you File Your Tax Return.
Pro note: In some situations, such as receiving restricted stock units, your employer may apply a flat withholding rate instead of approximating which may lead to a tax bill at the end of the year due to under-withholding.
How do you file your tax?
As a newcomer to the U.S. (for at least the first year and first filing), you should always, for simplicity, safety and peace of mind, use a proper accounting or tax firm. This applies too if you are in a situation that is more complicated than simply working one job (e.g. with assets or international considerations).
I personally recommend Jason from UpTrend Advisory, he’s been super helpful with information for not just me but also lots of expats who are here and need some help (once-off, or ongoing)!
After a year, most Americans use Turbo Tax, an online system like Etax in Australia (though privately run, so there’s a fee!). It’s pretty easy and cost-effective and it also helps you understand what’s driving your US tax. A “tax preparer” can help you get everything in a line if you need some help.
It is worth pointing out that deductions are quite complicated in the US – but most taxpayers who don’t have mortgages use a standardized deduction, which means you do not get a tax deduction on youraccountant fees. So don’t mentally deduct 40% when considering the cost!
I recently ran a tax webinar all about taxes for Australians and expats in the U.S.! You should definitely watch it because it answers all the top questions and people said things like:
“The webinars are very useful in providing an overview on expat topics”
and “Great webinar, very helpful and informative. Time well used!”