Federal Income Taxes
Disclaimer: No information on this page was prepared by a certified public accountant, and it should in no way be considered as tax advice. This is by no means a comprehensive tax resource and the people contributing to it are, just like you, students and researchers. It's meant as a guide on filing income taxes, but you should base your final decisions on information from either the IRS or the FTB.
Table of Contents
- Filing Methods
- Preparing your Tax Return
- Paying and Filing your Tax Return
- Estimated Federal Taxes
- Some Useful Links
As a graduate student, whether a US citizen or not, you're generally required to file income tax returns by the April 15th deadline every year.
Even if you haven't filed last year, you should determine if you'll be required to do so next year for two reasons. The first one is that you might need to make quarterly payments throughout the year to avoid a penalty if your taxes aren't being withheld (e.g. you have a Fellowship or one of your employers doesn't take off taxes from their contribution to your salary). Even if this requirement might not apply because you had no tax liability last year, you might still want to calculate the amount of taxes you'll be required to pay at the end of this year so as to plan accordingly since they tend to be around 10-20% of your wages.
The Internal Revenue Service (IRS) website is the place where you should find the answer for every kind of question regarding your federal taxes. Note, however, that taxes aren't an easy subject and the amount of information there might confuse you. I hope this document might clarify some doubdts and simplify the filing process, but you should, however, consult the IRS or the ASUC Student Legal Clinic for more personalized tax help.
You can choose whether to file your taxes by completing the forms and then either mailing them to the IRS or taking them with you to the nearest IRS office (useful if you have tax questions and prefer to double check before filing) or you can use e-file.
E-file is sometimes the most convenient way, but you may be required to pay a fee. There's also the problem that instead of a single IRS official and free e-filing website, there's tons of commercial companies providing the service and finding the one that charges you less might defeat the purpose of its convenience. However, assuming you earn below $52,000, you should qualify for freefile. Note that even if they freely e-file or prepare your tax return, there might be associated fees for completing state returns or even for sending the prepared return electronically, requiring you to still mail your printed return to avoid any fees. This all depends on which company you end up choosing and people who use this method should add here which, to their opinion, is the best service.
The rest of this document will concern preparing, filing and paying your tax return manually and can still serve as an information resource for people who e-file for convenience.
For an extensive list of downloadable forms, please refer to this IRS webpage.
The most common tax form for US Citizens is the 1040, which you can download from the above website alongside its instructions. If you qualify, as probably most of us do, you should check out the 1040-A or, even better, the 1040-EZ (if you don't claim any dependents), which are simplified versions of the previous form. To check if you qualify, you should read their particular instructions.
I'd assume Non-Residents should fill out the equivalent forms with the -NR subscript (e.g. 1040-NR-EZ).
Whatever your required choice of form, refer to their instructions for answering any doubdts about them. There's a separate page in which I include a summary of my understanding of what's considered taxable income for us, students or scholars. This, alongside any taxable interest, is what generally is required to complete the income part of your return. You should then use the tax tables and the amount withheld to figure out if you need to pay any taxes or you can claim a refund on tax withheld, and this would generally be all you need to complete your Federal income tax return.
To pay your taxes, you can either mail a check or money order with your tax return or pay electronically by electronic funds withdrawal (if you e-file), by credit card (by phone, online and through e-file, but it generally requires a fee), or by the free Electronic Federal Tax Payment System (EFTPS). The last one, of course, is the recommended one, but please note that it can take up to 15 days to enroll in this payment system since they mail you a PIN for accessing the system.
If you were to mail your tax return, you should address it to:
Internal Revenue Service Center Fresno, CA 93888-0014
And if you were to take it to the nearest office, that is:
1301 Clay St. Oakland, CA 94612 (510) 637-2487 (Open Monday-Friday - 8:30 a.m.- 4:30 p.m.)
Most people aren't required to pay estimated taxes quarterly unless one of their employers, or a fellowship they have, doesn't withhold taxes for them. If this were the case, US Citizens should refer to form 1040-ES (while Non-Residents to 1040-ES (NR)) to check if they indeed are required to pay quarterly payments during the upcoming year.
As a general rule, you must make estimated tax payments if you expect to owe at least $1,000 in tax for the upcoming year and your withholdings and credits will be less than the smaller of:
- 90% of the tax shown on your upcoming tax return,
- Your previous year tax.
However, if you didn't file a tax return the previous year or if your return didn't cover 12 months, then the above doesn't apply.
Exception: You won't be required to make estimated tax payments if you didn't have to pay any taxes last year.
It might be useful, though, to pay taxes quarterly rather than being faced by the full amount at the end of the year. In any case, completing form 1040-ES will inform you of your approximate upcoming year taxes so as to prepare accordingly.
The schedule for estimated tax payments is the following:
- 1st: ~April 15
- 2nd: ~June 15
- 3rd: ~Sept 15
- 4th: ~Jan 15
Note: Dates will move forward if they fall on a weekend.
As long as you at least pay your required amounts by the above deadlines then you won't be penalized. If you underpay one of your estimated payments, though, the remaining amount will incur a penalty which will depend on the number of days it stays unpayed.
Payment methods are the same as those outlined in the previous section. Once again, EFTPS is the recommended method as it lets you schedule all your payments as far as a year in advance, while still allowing you to cancel them two days before they are due.