You’ve finally landed that first, full-time job out of college. Congratulations! Now brace yourself for “on-boarding,” the process of starting a job that may involve a small mountain of paperwork. Here are key forms you’ll fill out:
Retirement and 401(k) forms
If your employer offers a retirement savings plan, such a 401(k), take advantage. You’ll save on taxes (or at least defer them). If your employer matches some of your contribution, take full advantage; otherwise, you’re leaving free money on the table.
Other retirement savings options may include individual retirement accounts and brokerage accounts. The earlier you start saving, the more you’ll have when you retire.
Direct deposit forms
“Direct deposit” means your paycheck will be transferred electronically into your bank account. That saves you a trip to the bank and gives you fast access to your money.
To set up direct deposit, provide your employer with a voided check from your checking account, or get the account number and routing number, and fill out a company direct deposit form.
Tip: some employers will let you divide your deposit into two or more accounts. If so, deposit a small amount of each paycheck in your savings account. It’ll add up over time, and chances are, you won’t miss it.
Tax paperwork
Brace yourself for sticker shock. Part of each paycheck will go to federal and state taxes, as well as deductions for Social Security and Medicare. (Sorry! Welcome to adulting.)
Before you receive your first paycheck, you’ll fill out a W-4. This tells your employer how much tax to withhold. Depending on that amount, you might get a refund in April or a big tax bill. Remember – the W-4 doesn’t affect how much in taxes you’ll ultimately pay, only how much will be withheld during the year.
Health insurance sign-up forms
A quick health insurance glossary:
The “premium” is the monthly charge for insurance. If your employer offers medical insurance, your premiums will be deducted automatically from your paycheck.
The “deductible” is the maximum amount you’ll pay per year for medical costs before insurance kicks in. After you “meet your deductible,” you’re responsible for a percentage of the costs, or a copay or a flat fee, depending on your policy. You may have to choose between two or more plan options; those with a higher deductible typically have lower premiums. Your state of health may help you choose which option is the best; don’t assume the lowest premium is the way to go.
A “copay” (copayment) is the small fee — usually $10 or $20 — you pay every time you visit the doctor or get a prescription filled.
Yes, all this is complicated. Don’t be shy about asking questions. Talk to your
human resources representative. It’s in everyone’s best interest if you make informed choices now.