2007_02_01_archive

Death, Taxes, and Grad School

One of the many differences between me and my friends who got "real

jobs" after college is how Uncle Sam (and his state- and city-level

brethren) decide we should be classified in the tax code. Since it's

getting to be that time of year again, I figured I'd try to relate

some of the confusion I've experienced because of the

non-intuitive-ness of it all.

Back in high school and college, I got a W-2 at the end of the year

for any job I held, listing how much had been withheld from my

paycheck for federal and state tax, etc. All it took to do my taxes

(and get my refund!) was the aptly named 1040-EZ.

In grad school, I was lucky enough to be awarded a fellowship. There

is a difference in the way the federal government regards the various

forms of grad-student income.

Princeton required me to TA for one semester, and that year I had a

combination of fellowship and salaried income, so I remember that mess

particularly fondly.

Permit me to explain:

If you're TA'ing a class (or, as Princeton calls it, acting as an AI

or a preceptor), that is considered salaried work, so you still

receive a W-2 and have federal and state taxes withheld. There is no

money withheld from fellowship income at Princeton. (Is this different

anyplace else?) That means I don't get a W-2.

Instead of the 1040-EZ, I have to use the tax tables to estimate what

my tax will be for the coming year and send in a stub with a check to

the U.S. Treasury quarterly. Then, I have to use a 1040-A form to

report my estimated payments and deduct that from my calculated tax.

There's a fine if you don't pay a certain amount of estimated tax in

advance, so that's why I don't just pay up in one chunk on April 15th.

The state-level taxes have the potential to add another layer of

complexity, but I've been lucky because fellowship stipends are not

taxable in the state of NJ, so I'd always get a little bit of a refund

there. I grew up in NJ, so I didn't bother changing my residency or

anything, either. (Now that I live in PA, I need to look into whether

I'll owe tax at state level). City-dwelling grad students, how

complicated is the tax situation for you?

Just for kicks, I'll link to Princeton's tax requirement sheet. I

don't think you need to have an on-campus IP address to access it.

You always hear tell of random grad students who don't pay their

taxes, figuring that it isn't worth the government's time to audit

someone who only makes 19K a year. Good luck with that. I don't have