Federal Income Taxes

InternalPub.FederalIncomeTaxes History

Hide minor edits - Show changes to markup

May 15, 2007, at 08:36 AM by sprinkle -
Changed lines 1-4 from:

Disclaimer: 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.

to:

(:include Taxes#disclaimer#disclaimerend:)

May 15, 2007, at 08:35 AM by sprinkle -
Changed line 2 from:

Disclaimer: 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.

to:

Disclaimer: 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.

May 15, 2007, at 08:35 AM by sprinkle -
Changed line 2 from:

Disclaimer: 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.

to:

Disclaimer: 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.

May 15, 2007, at 08:34 AM by sprinkle -
Changed lines 1-4 from:

Disclaimer: 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.

to:

Disclaimer: 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.

May 15, 2007, at 12:48 AM by fgb -
Added line 2:
May 15, 2007, at 12:44 AM by fgb -
Deleted line 1:
Changed line 59 from:
  • 100% of the tax shown on your previous year tax return.
to:
  • Your previous year tax.
May 15, 2007, at 12:22 AM by fgb -
Added line 2:
May 15, 2007, at 12:21 AM by fgb -
Added line 1:
May 15, 2007, at 12:19 AM by fgb -
Changed line 8 from:
to:
Changed lines 52-53 from:

Estimated Taxes

to:

Estimated Federal Taxes

Changed lines 70-71 from:

Note: dates will move forward if they fall on a weekend.

to:

Note: Dates will move forward if they fall on a weekend.

May 15, 2007, at 12:17 AM by fgb -
Changed lines 63-65 from:

It might be useful, though, to pay taxes quarterly rather than being faced by the full amount at the end of the year and completing form 1040-ES will give you an approximation of next year taxes.

The schedule for estimated taxes payments is the following:

to:

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:

May 15, 2007, at 12:14 AM by fgb -
Changed lines 63-64 from:

It might be useful, though, to pay taxes quarterly rather than being faced by the full amount at the end of the year and completing form 1040-ES will prepare you for the upcoming year taxes.

to:

It might be useful, though, to pay taxes quarterly rather than being faced by the full amount at the end of the year and completing form 1040-ES will give you an approximation of next year taxes.

May 15, 2007, at 12:13 AM by fgb -
Changed lines 59-61 from:

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.

to:

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.

May 15, 2007, at 12:11 AM by fgb -
May 15, 2007, at 12:10 AM by fgb -
Added line 78:
  • http://www.ocf.berkeley.edu/%7Eslc/ - ASUC Student Legal Clinic
Deleted line 79:
  • http://www.ocf.berkeley.edu/%7Eslc/ - ASUC Student Legal Clinic
May 15, 2007, at 12:08 AM by fgb -
Added line 9:
Changed lines 77-79 from:
  • http://www.irs.gov/ - Internal Revenue Service (IRS)
to:
  • http://www.irs.gov/ - Internal Revenue Service (IRS)
  • http://ga.berkeley.edu/advocacy/taxes.php - The Graduate Assembly: Tax Information for Graduate Students
  • http://www.ocf.berkeley.edu/%7Eslc/ - ASUC Student Legal Clinic
May 15, 2007, at 12:05 AM by fgb -
Changed lines 17-18 from:

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.

to:

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.

Changed lines 53-54 from:

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(and Non-Residents to 1040-ES (NR)) to check if they indeed are required to pay quarterly payments during the year.

to:

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.

Changed lines 56-70 from:

1 - 90% of the tax shown on your upcoming tax return 2 - 100% of the tax shown on your previous year tax return. 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. 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 and completing 1040-ES will give you an approximation of te upcoming year taxes.

The schedule for paying estimated taxes is the following: 1st Payment: ~April 15 2nd Payment: ~June 15 3rd Payment: ~Sept 15 4th Payment: ~Jan 15 As long as you pay at least your required amount by the above deadlines (which will adjust depending on if the dates fall on weekends) then you won't be penalized. If you underpay one of your estimated payments, the remaining amount will incur a penalty dependent 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.

to:
  • 90% of the tax shown on your upcoming tax return,
  • 100% of the tax shown on your previous year tax return.

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 and completing form 1040-ES will prepare you for the upcoming year taxes.

The schedule for estimated taxes 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.

Some Useful Links

  • http://www.irs.gov/ - Internal Revenue Service (IRS)
May 14, 2007, at 11:53 PM by fgb -
Added line 8:
Changed lines 51-52 from:

Estimated Tax

to:

Estimated Taxes

Changed lines 61-70 from:

It might be useful, though, to pay taxes quarterly rather than being faced by the full amount at the end of the year and completing 1040-ES will give you an approximation of te upcoming year taxes.

to:

It might be useful, though, to pay taxes quarterly rather than being faced by the full amount at the end of the year and completing 1040-ES will give you an approximation of te upcoming year taxes.

The schedule for paying estimated taxes is the following: 1st Payment: ~April 15 2nd Payment: ~June 15 3rd Payment: ~Sept 15 4th Payment: ~Jan 15 As long as you pay at least your required amount by the above deadlines (which will adjust depending on if the dates fall on weekends) then you won't be penalized. If you underpay one of your estimated payments, the remaining amount will incur a penalty dependent 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.

May 14, 2007, at 11:45 PM by fgb -
Changed lines 52-53 from:

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(and Non-Residents to 1040 ES (NR)) to check if they indeed are required to pay quarterly payments during the year.

to:

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(and Non-Residents to 1040-ES (NR)) to check if they indeed are required to pay quarterly payments during the 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: 1 - 90% of the tax shown on your upcoming tax return 2 - 100% of the tax shown on your previous year tax return. 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. 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 and completing 1040-ES will give you an approximation of te upcoming year taxes.

May 14, 2007, at 11:38 PM by fgb -
Changed lines 48-53 from:

(Open Monday-Friday - 8:30 a.m.- 4:30 p.m.)@]

to:

(Open Monday-Friday - 8:30 a.m.- 4:30 p.m.)@]

Estimated Tax

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(and Non-Residents to 1040 ES (NR)) to check if they indeed are required to pay quarterly payments during the year.

May 14, 2007, at 11:24 PM by fgb -
Changed lines 24-26 from:

The rest of this document will concern preparing, filing and paying your tax return manually and can serve as an information resource for people who do e-file for convenience.

to:

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.

May 14, 2007, at 11:23 PM by fgb -
Changed lines 22-23 from:

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 it should add here which, to their opinion, is the best.

to:

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.

May 14, 2007, at 11:22 PM by fgb -
Changed lines 22-23 from:

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. This all depends on which company you end up choosing and people who use it should add here which, to their opinion, is the best.

to:

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 it should add here which, to their opinion, is the best.

May 14, 2007, at 11:20 PM by fgb -
Deleted line 0:
Changed lines 14-15 from:

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 taxe 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 a good 10-20% of your wages.

to:

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.

May 14, 2007, at 11:19 PM by fgb -
Deleted line 1:
Changed lines 13-14 from:

As a graduate student, whether you are a US citizen or not, you're generally required to file income tax returns by the April 15th deadline every year.

to:

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.

April 14, 2007, at 12:28 AM by fgb -
Changed lines 2-3 from:

[@%center%'''Disclaimer:''' 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 [[http://www.irs.gov/|IRS]] or the [[http://www.ftb.ca.gov/|FTB]].@]

to:

Disclaimer: 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.

April 14, 2007, at 12:28 AM by fgb -
Changed lines 2-4 from:

Disclaimer: 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.

to:

[@%center%'''Disclaimer:''' 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 [[http://www.irs.gov/|IRS]] or the [[http://www.ftb.ca.gov/|FTB]].@]

April 14, 2007, at 12:27 AM by fgb -
Added line 2:
April 14, 2007, at 12:27 AM by fgb -
Changed lines 2-4 from:

Disclaimer: 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.

to:

Disclaimer: 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.

April 14, 2007, at 12:26 AM by fgb -
Changed lines 1-5 from:

Disclaimer: 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.

to:

Disclaimer: 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.

April 14, 2007, at 12:25 AM by fgb -
Changed lines 1-3 from:

%center&Disclaimer: 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.

to:

Disclaimer: 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.

April 14, 2007, at 12:25 AM by fgb -
Changed lines 1-2 from:

Disclaimer: 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 [[http://www.irs.gov/|IRS]] or the [[http://www.ftb.ca.gov/|FTB]].

to:

%center&Disclaimer: 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.

April 14, 2007, at 12:22 AM by fgb -
Changed lines 1-2 from:

@Disclaimer: 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.@

to:

Disclaimer: 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 [[http://www.irs.gov/|IRS]] or the [[http://www.ftb.ca.gov/|FTB]].

April 14, 2007, at 12:22 AM by fgb -
Changed lines 1-2 from:

Disclaimer: 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.

to:

@Disclaimer: 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.@

April 14, 2007, at 12:22 AM by fgb -
Changed lines 1-2 from:

Disclaimer: 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.

to:

Disclaimer: 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.

April 14, 2007, at 12:21 AM by fgb -
Changed lines 1-2 from:

Disclaimer: 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.

to:

Disclaimer: 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.

April 14, 2007, at 12:21 AM by fgb -
Changed lines 1-2 from:

NOTE: THIS IS A WORK IN PROGRESS!!!

to:

Disclaimer: 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.

April 08, 2007, at 05:08 PM by fgb -
Deleted line 6:
Changed lines 35-76 from:

Whatever your required choice of form, refer to their instructions for answering any doubdts about them. Following I'll include a summary of my understanding of what is 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.

What's Considered Taxable Income?

Form 1098-T

Most of us should have received a 1098-T, which is a form the university is required to file if it receives qualified tuition and related expenses from either us, our employers, or a fellowship.

The amount of box 1 shows the payments received for qualified tuition and related expenses. Check your CARS account through Bear Facts to see the total amount paid by your funding source. There will be a difference between this amount and the one shown on box 1 and it usually represents the class pass fee (transit) and health insurance, both of which are taxable to the best of my knowledge.

The amount of box 2 is supposed to include the stipend received from scholarships, grants, or fellowships. As far as I know, this number is usually wrong and isn't reliable. Sometimes it reflects less stipend and other times more. You should refer to your fellowship award letter or to your monthly paychecks to more accurately calculate the amount of stipend received.

W-2 Forms

You might have also received a W-2 form(s) if your employer withheld part of your income to pay for your income, Social Security, and Medicare taxes.

The amount of box 1 should represent the total of earnings from that employer during the tax year you are filing for. You should add the amounts from box 1 of all W-2's you receive to calculate your total earnings subject to withholding.

Box 2 shows the amount of federal income tax withheld, which should pay at least part of your tax liability.

Taxable and Non-taxable portions of Fellowships

If you received a fellowship and are a degree candidate at a qualified educational institution (which we generally are), there is a part of your fellowship that is non-taxable (unless the terms of the fellowship do not prohibit the expense). The tax-free portion of your fellowship comprises the amount of it used to pay:

  • Tuition
  • Fees
  • Books
  • Supplies
  • Equipment

The last four items in the above list are tax-free only if required of all students in the course of study. If not, you might still be able to deduct it by itemizing deductions, which should require schedule A of form 1040 and which only makes sense if your itemized deductions are greater than the standard deduction for your filing status ($8,450 if single for the 2006 tax year). The taxable portion of your fellowship comprises the amount used to pay for:

  • Room & Board
  • Travel
  • Teaching
  • Research Services
  • Other

Total Taxable Income

The sum of your stipend (from fellowship award letters and W-2's), health insurance, and class pass fee minus the non-taxable part of your fellowship should amount to your taxable income. Note that you shouldn't deduct your tuition if you haven't included it as part of your fellowship stipend in the first place.

to:

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.

April 08, 2007, at 04:44 PM by fgb -
Changed lines 80-81 from:

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.

to:

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.

April 08, 2007, at 04:10 PM by fgb -
Changed line 8 from:
to:
Changed lines 21-30 from:

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. This 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 provicing 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 would freely file or prepare your tax return, there might be associated fees for completing state returns as well or even sending them electronically, requiring you to still mail your printed return. This all depends on which company you end up choosing and people who use it should add here which, to their opinion, is the best.

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.)
to:

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. This all depends on which company you end up choosing and people who use it should add here which, to their opinion, is the best.

Changed lines 78-80 from:

Paying your Taxes

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.

to:

Paying and Filing your 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.

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.)
April 08, 2007, at 04:01 PM by fgb -
Added line 4:
Added lines 11-12:

Introduction

April 08, 2007, at 04:00 PM by fgb -
Changed line 3 from:

Contents

to:

Table of Contents

Changed lines 8-9 from:
to:

April 08, 2007, at 03:56 PM by fgb -
Changed lines 3-4 from:

Table of Contents

to:
Changed lines 15-16 from:

Filing Methods

to:

Filing Methods

Changed lines 30-31 from:

Preparing your Tax Return

to:

Preparing your Tax Return

Changed lines 40-41 from:

What is Considered Taxable Income?

to:

What's Considered Taxable Income?

Changed lines 80-81 from:

Paying your Taxes

to:

Paying your Taxes

April 08, 2007, at 03:48 PM by fgb -
Changed lines 3-4 from:
to:

Table of Contents

Changed lines 36-37 from:

Taxable Income

to:

What is Considered Taxable Income?

April 08, 2007, at 03:45 PM by fgb -
Changed lines 77-78 from:

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.

to:

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.

April 08, 2007, at 03:15 PM by fgb -
Added lines 1-78:

NOTE: THIS IS A WORK IN PROGRESS!!!

As a graduate student, whether you are 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 taxe 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 a good 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.

Filing Methods

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. This 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 provicing 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 would freely file or prepare your tax return, there might be associated fees for completing state returns as well or even sending them electronically, requiring you to still mail your printed return. This all depends on which company you end up choosing and people who use it should add here which, to their opinion, is the best.

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.)

The rest of this document will concern preparing, filing and paying your tax return manually and can serve as an information resource for people who do e-file for convenience.

Preparing your Tax Return

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. Following I'll include a summary of my understanding of what is 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.

Taxable Income

Form 1098-T

Most of us should have received a 1098-T, which is a form the university is required to file if it receives qualified tuition and related expenses from either us, our employers, or a fellowship.

The amount of box 1 shows the payments received for qualified tuition and related expenses. Check your CARS account through Bear Facts to see the total amount paid by your funding source. There will be a difference between this amount and the one shown on box 1 and it usually represents the class pass fee (transit) and health insurance, both of which are taxable to the best of my knowledge.

The amount of box 2 is supposed to include the stipend received from scholarships, grants, or fellowships. As far as I know, this number is usually wrong and isn't reliable. Sometimes it reflects less stipend and other times more. You should refer to your fellowship award letter or to your monthly paychecks to more accurately calculate the amount of stipend received.

W-2 Forms

You might have also received a W-2 form(s) if your employer withheld part of your income to pay for your income, Social Security, and Medicare taxes.

The amount of box 1 should represent the total of earnings from that employer during the tax year you are filing for. You should add the amounts from box 1 of all W-2's you receive to calculate your total earnings subject to withholding.

Box 2 shows the amount of federal income tax withheld, which should pay at least part of your tax liability.

Taxable and Non-taxable portions of Fellowships

If you received a fellowship and are a degree candidate at a qualified educational institution (which we generally are), there is a part of your fellowship that is non-taxable (unless the terms of the fellowship do not prohibit the expense). The tax-free portion of your fellowship comprises the amount of it used to pay:

  • Tuition
  • Fees
  • Books
  • Supplies
  • Equipment

The last four items in the above list are tax-free only if required of all students in the course of study. If not, you might still be able to deduct it by itemizing deductions, which should require schedule A of form 1040 and which only makes sense if your itemized deductions are greater than the standard deduction for your filing status ($8,450 if single for the 2006 tax year). The taxable portion of your fellowship comprises the amount used to pay for:

  • Room & Board
  • Travel
  • Teaching
  • Research Services
  • Other

Total Taxable Income

The sum of your stipend (from fellowship award letters and W-2's), health insurance, and class pass fee minus the non-taxable part of your fellowship should amount to your taxable income. Note that you shouldn't deduct your tuition if you haven't included it as part of your fellowship stipend in the first place.

Paying your Taxes

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.