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| financial_advice:taxes [2013/02/25 04:57] – [What income do you report?] ishivvers | financial_advice:taxes [2013/06/03 23:40] – [Fellowships] ishivvers |
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| ====Fellowships==== | ====Fellowships==== |
| {{financial_advice:cal.jpg}}If you're on a fellowship, watch out for taxes! Unlike payroll, fellowships have no withholding. This means that the money stays untaxed until April 15, when you suddenly have to pay up. If your bill is over $1000 (and it probably will be) for 2 consecutive years, you'll have to pay a penalty. Now, if that money has been sitting in an ING account it's no big deal, because the penalty will be about the size of the interest you made on it, but it is a hassle. To avoid this hassle, get a W-4 form from the Department staff which will increase your withholding on your teaching money. Increase the monthly withholding so that you'll owe no taxes in April. If you aim too high, you'll get a refund. | {{financial_advice:cal.jpg}}If you're on a fellowship, watch out for taxes! Unlike payroll, fellowships have no withholding. This means that the money stays untaxed until April 15, when you suddenly have to pay up. If your bill is over $1000 (and it probably will be) for 2 consecutive years, you'll have to pay a penalty. Now, if that money has been sitting in an ING account it's no big deal, because the penalty will be about the size of the interest you made on it, but it is a hassle. To avoid this hassle, you need to increase your withholding on your teaching money. To do this, you |
| | used to need to fill out a W4 (available from the staff), but as of Spring 2013, everything is handled online through |
| | [[https://atyourserviceonline.ucop.edu/ayso/]]. Login there, navigate to "Tax Withholdings", and increase your monthly withholding so that you'll owe no taxes next April. If you aim too high, you'll get a refund. |
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| If, for whatever reason, you don't get any payroll funds, you can't increase your withholding because there's nothing to withhold, so you'll have to file taxes quarterly to avoid the penalty. Here's how: | If, for whatever reason, you don't get any payroll funds, you can't increase your withholding because there's nothing to withhold, so you'll have to file taxes quarterly to avoid the penalty. Here's how: |
| * Federal: [[http://www.eftps.gov/]]. You have to sign up then get something in the mail the first time you use it (this can take a few weeks). | * Federal: [[http://www.eftps.gov/]]. You have to sign up then get something in the mail the first time you use it (this can take a few weeks). |
| * CA: [[http://www.ftb.ca.gov/online/webpay/index.html]]. You just need your CSN, which you can get immediately online if you have a copy of last year's CA taxes. (This is linked from the CA Franchise Tax Board's main site.) | * CA: [[http://www.ftb.ca.gov/online/webpay/index.html]]. You just need your CSN, which you can get immediately online if you have a copy of last year's CA taxes. (This is linked from the CA Franchise Tax Board's main site.) |
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| ====What income do you report?==== | ====What income do you report?==== |
| {{financial_advice:cal.jpg}}The most common confusing part about our situation is how much we need to report to the IRS. Regardless of whether you're on a fellowship, you need to report money reported on a "1098-T" form, which you can get at [[http://www.1098t.com/|1098t.com]]. The on-line version has more information and breakdowns than the paper version you get in the mail. | {{financial_advice:cal.jpg}}The most common confusing part about our situation is how much we need to report to the IRS. Regardless of whether you're on a fellowship, you need to report money reported on a "1098-T" form, which you can get at [[http://www.1098t.com/|1098t.com]]. The on-line version has more information and breakdowns than the paper version you get in the mail. |
