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add more 1098t info

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tlnagy committed Jun 1, 2017
1 parent 567ae78 commit 1e4658d0658b85071f06f814ccc254fddf0bd8b9
Showing with 11 additions and 3 deletions.
  1. +11 −3 blog/_posts/2017-05-31-grad-student-taxes.md
@@ -13,7 +13,8 @@ I think I would have appreciated knowing the answers to in my first two years[^2
### Do we have to pay taxes?
Yes, both state and federal. The tricky part is that while you are paid by UCSF
on a 1098t nothing is withheld so you have pay the full amount come April.
on a 1098-T form (normally for your first two years) nothing is withheld for taxes
so you have pay the full amount come April.
### How much should I set aside each month for taxes?
@@ -23,7 +24,14 @@ situation. I would probably aim for $425.
Now assuming that you did not have any external income, you should expect to pay
roughly $2000[^3] in your first year since you are only taxed for October, November, and
December. 2nd year you have to pay for the entire year and this works out to
being close to $5000. It's a lot if you're not ready for it.
being close to $4800. It's a lot if you're not ready for it.
### How much do I actually owe?
In the simplest case, your "taxable income" is simply the difference between
box 5 and box 1 on your 1098-T form. This value will be higher than your stipend
since it includes the "taxable" contributions to our health insurance, UC SHIP.
You can find your 1098-T at <https://1098t.com>.
### How do I e-file for free?
@@ -45,7 +53,7 @@ you are setting this up during e-filing.
### Can we contribute to a Roth IRA?
Unfortunately, to the best of my knowledge, we cannot. Since the money we make on a
1098t is considered taxable, unearned income it does not qualify for IRA. According
1098-T is considered taxable, unearned income it does not qualify for IRA. According
to [IRS Pub 590-A](https://www.irs.gov/pub/irs-pdf/p590a.pdf) (Page 6):
> Scholarship and fellowship payments are compensation for IRA purposes only if shown in box 1 of Form W-2

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