Tax advice
From GradBook
Note: this document is for informational purposes only. It is NOT tax advice! For professional tax advice, please visit a local tax preparation center.
Contents |
International Students
The International Student Office (ISO) has prepared an extensive tax information document for international students: [1]
For more info, please see the ISO website ([2]) and watch for announcements about the ISO tax preparation seminar in January/February.
Since this info for International Students is so comprehensive, the rest of this doc is geared to Domestic Students.
Domestic Students
Watch for announcements about tax preparation seminars sponsored by the Graduate Student Council (GSC) in January/February. In the meantime, you may find the following information useful:
The Graduate Student Office (GSO) has a little bit of tax info: [3].
If you have an RA/TA
The tax-paying process should be similar to what you'd find in any other job. Taxes are withheld by MIT and you receive a W-2 in January from the Payroll Office. You may need to file some tax forms (W-4, I-9) to get started. These should be available in the EECS Graduate Office, 38-444, or in the MIT Payroll office, NE49-3131.
If you have a Fellowship
Contrary to popular rumor, YOU MUST PAY TAXES (again, this is just information, not advice). The following IRS publication specifies who must pay taxes and what part of income is taxable: [4].
Quick Summary: tuition, books, and fees are generally not taxable, but money spent on rent, food, research, travel, etc. IS. You must claim this fellowship money as additional income on your 1040, even if you do not receive any official tax documents containing this information.
So you have to pay taxes, how do you do it? Estimated taxes. See the following doc, chapter 2: [5]. An excerpt:
General Rule - You must pay estimated tax for 2009 if both of the following apply:
- You expect to owe at least $1,000 in tax for 2009, after subtracting your withholding and credits.
- You expect your withholding and credits to be less than the smaller of:
- 90% of the tax to be shown on your 2009 tax return, or
- 100% of the tax shown on your 2008 tax return. Your 2008 tax return must cover all 12 months.
In general, if you have any kind of fellowship, you must pay estimated taxes or face penalties at the end of the year. Estimated taxes are due April 15, June 15, Sept 15 and Jan 15 and each payment should be about 1/4 of the total tax you expect to pay at the end of the year (after any withholdings from other jobs and partial RA/TA). You will claim these payments on your 1040.
Estimated taxes are paid by filing a 1040ES for the IRS: [6] and a Form 1-ES for Massachusetts: [7] [8]
How to file
Federal
The IRS instituted free filing for federal returns last year. For info, see: [9].
You'll have to file either at 1040, 1040A, or 1040EZ. If you pay estimated tax, you cannot file 1040EZ.
To find paper forms, visit the IRS website ([10]) and search in forms and publications for the proper form. Publication 17 is the most comprehensive document on filing federal taxes.
Massachusetts
Massachusetts tax info may be found at [11] or more specifically at [12].
You will need to file either a Form 1 NR-PY if you are a nonresident or a partial year resident. Full year residents fill out Form 1. You may also need to fill out a schedule Y if you have certain deductions. All these forms will be available later this year at [13].
TIR 95-7 ([14]) states that if you are in the state of Massachusetts for more than 183 days, you are considered a resident for tax purposes. Remember that for next year.
There are also several tax preparation sites you may find helpful in filing online. Most include tax preparation software so all you do is answer questions and your forms are filled out automatically. Some may allow you to file for free and some may charge a fee for MA and/or federal filing. Several are listed on the IRS site ([15]).
If you make less than $35,000, you may qualify to file MA and federal taxes for free at: [16]. [17] and [18] also offer online filing and tax preparation software (at a cost).
There's also an H&R Block on Prospect in Central Square should you seek professional tax preparation.
Useful Contact Info
- MIT Payroll (issues W-2s in January), NE49-3131, [19]
- IRS Toll Free assistance, 1-800-829-1040
- Foreign Students/Scholar Issues, 1-215-516-2000
- Refund information, 1-800-829-3676
- IRS Taxpayer Advocate, 1-877-777-4778
- Social Security Administration, 1-800-772-1213
Good luck, and happy tax preparation!
