US INCOME TAX!

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

what she would do would be:

1. calculate the difference between the amount reported as scholarship/fellowship income and tuition/fees paid as per the form received from the school.

2. figure out what other expenses she had that are deductible from that income. This is one of those special situations that has its own rules/worksheet

3. deduct those additional expenses

4. report that amount (income - school reported tuition & fees - other deductible expenses) on line 7 of the 1040.

xp - that's probably because it's reported on the 1098-T, which all students receive.

keep seeing this as INCOME TAXI

https://www.ecsi.net/img/1098t_2011.jpg

the form should look like this.

the amount in box 5 would include her stipend and tuition payments.

okay I think a lot of the confusion is coming from the fact that they must have sent it to the wrong address or something. I will tell her to get one asap. thanks a lot sarah!

no prob. it's likely it's something she could download, as opposed to waiting for it to be mailed. At least that's how UC Berkeley does it, as you probably know.

not sure, the school site says 'we can mail you a new one', but it's possible they can get it sooner. I think we just figured if something like this existed she would have gotten it.

You can also directly check http://www.1098t.com/ if the school she goes to is registered with the site.

hmm that might be nifty thank you

does anyone know which form I gotta use if I made, say, $400 chump change besides my salary? 1040 not 1040A, right?

(yes, I report every dime, I can't do time)

if it's only $400, you can call it miscellaneous income on line 21. But yeah, that requires the 1040.

@self-employed folks: is there a good rule of thumb for calculating quarterly estimated taxes? my income will probably vary over the course of the year and will likely be quite different from last year, so i don't think just dividing what i payed in 2011 by four really makes sense.

Glad I re-read the rules on the 1099-G because I could have done myself out of a refund.

No help here, I'm afraid. I like the estimated quarterlies that my tax preparer has set up -- they usually leave me with a refund that covers my April payment and most of my June payment, so I don't have to worry about it until the fall, which is when I get my biggest paychecks of the year.

xxp - it depends on how much you net, and what other deductions you have. Self-employment tax used to 15.3%, but now I think it's down to 13.3% because of the payroll tax cuts. So, you have to figure that plus your regular income tax rate.

However, you want to pay at least as much as you owe at the end of this year, unless you know your income is going to be significantly lower.

Was helping a friend with turbotax and found out that it had apparently "upgraded" him to the home and business service for $99 (fed only), which he clearly did not need as a single, childless retail worker with no assets or outside income. What's worse, there is no way to downgrade once you "upgrade." Seems pretty fucked up.

Did it charge him $99 or was he upgraded for "free"?

no it charged him.

well, if it makes him feel any better he can deduct that next year

only if he itemizes deductions

fuck this shit

thankfully my day job cut into what i owed from freelancing, cuz o_O

^^ i was freelancing all year and i've wound up having to dip into what i'd set aside to keep myself afloat these last 3 months, now i'm filing an extension and still owe in the four figures

closer to 5 figures, even

and fucking turbotax trying to rip me off for my last hundred dollars til payday in a month, fuck you

Same boat as you HOOS. I owed 4 figures. Still unemployed. Had to borrow money from my moms to pay for it. Thankfully I lost my last shred of dignity about 4 months ago, so I didn't feel too bad. But that freelancing bullshit is for the birds.

oh yeah, also got stuck paying 80 on HR Block because of the "contractor" thing (should have been 40, but I had to pay again for Virginia, for which I owed and received nothing).

Hey you know that thing where some people will joke with you about well hey you're married now so you lost your freedom but at least you will save money on taxes? Well those people are filthy bastard liars.