US INCOME TAX!

That's what everyone's told me. But you'd think the IRS would send a letter or something letting me know it'd done it.

they generally do send letters when they do this.

Did you learn about it from the IRS, or from your tax preparer?

IRS.

i've been reading some message boards about the irs and i'm pretty sure you're going to prison? idk

b-b-but I've said nice things about Reagan!

I always do the taxes for my household. I have for my entire adult life. This encourages me to keep our finances quite simple and straightforward, but it also means I fully understand where our money comes from and where it goes. This seems a Good Thing.

lol last time I turn to a bunch of internet hardmen for tax advice -- I'm saving my $20 and copying the stuff that it filled out for me and submitting a hard copy.

gah our tax system really sucks can't believe I owe money MAYBE I SHOULD GET SOME HOUSES AND KIDS

I haven't had a refund in years. But then I don't pay a lot from my check either. I basically pay the minimum to avoid the under payment penalty.

MAYBE I SHOULD GET SOME HOUSES AND KIDS

Houses? Sure. Buy small ones, tho. And if you want to come out money ahead, skip the kids.

xxp - maybe it's because you make a lot of money (relatively speaking), iatee?

If he were making money, he wouldn't be paying taxes. /half-joking

no, it's true -- it is really atrocious (to me) the way passive (investment) income is taxed so low relative to earned income. They should be taxed the same imo.

rly, rly do not make a lot of money

More than $15,000 per annum, amirite?

more...by exactly $3

well... there you go!

the eitc needs to reward poor people *without kids* not poor people *with kids*

People with kids consume more apple pie and play more baseball. This is what makes America great.

dude, if you owe federal tax on $15k a year, either it's from self-employment income or your withholding is seriously fucked.

http://www.businessweek.com/printer/articles/18010-the-people-vs-dot-the-irs

yeah my withholding is messed, but I'm mostly just offended that there isn't a single deduction or tax credit that I (/ the gf) qualify for.

Do you pay student loans? Deduct the interest.

no I don't maybe I'll get some

alfred: statute of limitations for audits is 3 years, and 10 years from date of assessment for a tax liability. i think you're fine.

for COLLECTION of a tax liability.

Thanks! I also read, however, that if you DON'T file taxes at all there's no statute of limitations. So be warned.

there isn't a single deduction or tax credit that I (/ the gf) qualify for

Not even the 'standard deduction'? Even if you can be claimed as a dependent by someone else there is a minimum standard deduction of $950, and you and the gf might qualify for that deduction up to $5800 - presuming you are each filing as single. Ferret out IRS publication 501 and fill in the worksheet on page 24. And don't forget about the 'personal exemption', either!

yeah I meant beyond the standard deduction

not that smaller deductions would matter w/ that in mind, it's still insulting that there aren't any that affect me. my gf could have deducted books n'stuff for grad school but it didn't come close to approaching the standard deduction.

i don't have any figures, but there are many millions of wage earners who don't itemize, so you are in a crowded boat. Mortgage interest is the biggest reason to itemize. Pretty much the only other way to make itemizing pay off for ordinary people is to have a shit ton of medical expenses and who wants that?

so my gf is filing a schedule c for her grad stipend - can we submit that without pay stubs?

that's a good question! but i don't know the answer. no expert, etc.

generally speaking, the documentation is only really going to matter if you're audited, and the audit risk on small potatos tax returns is vanishingly small. i would expect her grad school has a record of it somewhere, so if they try to pinch you, you can probably dig up some proof and beat the rap. just read the irs instructions slowly and carefully before you file to make sure you understand them.

yeah I think a lot of her grad school friends just pretend like they don't have to pay taxes

xp - was it reported on a 1099 Misc? Generally stipends/fellowships for grad school are considered wages (not subject to self-employment tax).

hmm other things I read online suggested a schedule c but maybe 1099 misc is better.

Often these things are reported on Form 1098-T (which reports tuition/fees payments made). The amount in the scholarship/fellowship box will be significantly larger than the amount in the box for tuition/fees paid. The difference would be considered taxable income. However, you can reduce that by relevant expenses.

If she didn't receive a 1099-Misc from the school showing the income, then she shouldn't be filing a Schedule C.

she didn't receive *anything* from her school and just has untaxed pay stubs (and then started getting direct deposit, so doesn't even have many). so we don't really know what tuition/fees even were.

She really needs to check w/her school to see how they reported the income.

hmm would it really make a huge difference if we just ignored the tuition that the school paid to itself?

the issue is where she reports her payments, and what payments were reported. If (as I'm guessing is the case) her stipend was considered a scholarship/fellowship and reported on the tuition statement, then she needs to report that as wages (line 7). If it was considered non-employee compensation, then she would file a schedule C. If she reports the income inconsistently with how the school reported it, the IRS might get "confused."

the school's tuition statement or hers? I believe she is considered an employee, but I think tuition might be 'waived' and not paid for? I will tell her to email the school though.

the school should have issued her a tuition statement. Have her email the school and ask for the 1098-T. What she reports should match what they report, more or less. Sometimes schools' reporting misses things, for example, UC Berkeley (a couple of my clients are UCB grad students) doesn't include some mandatory fees in the fees they report as paid/charged. In that case, she can deduct them from the amount she reports as income.

hmm that makes sense. alright, last question (thanks a lot btw) - I'm looking at the 1099-MISC, and I know she gets to deduct her books from this...but where?

Wait, I think you might be confused. The 1099-Misc is a form she would have received from the school IF her payments were considered non-employee compensation. I would be surprised if that were the case.

in summary:

if 1099-Misc, then Schedule C
if 1098-T scholarship/fellowship > tuition/fees, then line 7 wages

okay yeah I was actually on the school website and was looking at 'Other Stipends' and not 'Grad School Stipends'. would her deductions just be included in regular deductions and thus still not outweigh the standard deduction (being sig less than $5800) - I think that was what I originally assumed.

also on the university's website it says 'Tax Document Issued by the University: None' for grad stipend