Federal+Taxes


 * Disclaimer: Use at your own risk. This is not guaranteed to be correct. Please visit [|the IRS website] for complete information.

=Files=

Form [|1040-ES], Estimated Tax for Individuals Form 40-ESV, Oregon estimated tax instructions and payment voucher

=Payment dates for 2012 tax year=

Tuesday, April 17, 2012 Friday, June 15, 2012 Monday, September 17, 2012 Tuesday, January 15, 2013

=How to file quarterly estimated taxes=

Do I need to file?
IN GENERAL, you need to file quarterly estimated taxes if you expect to owe at least $1000 AND you expect your withholding and credits to be less than the smaller of: Thus, most graduate students on grants that do not have taxes taken out of their checks will need to make quarterly payments. However, be sure to double check by reading the guidelines on form 1040-ES and [|Publication 505 on the IRS website].
 * 1) 90% of the tax shown on your 2010 tax return, or
 * 2) 100% of the tax shown on your 2009 tax return.

Approaches
There are several ways that GK-12 fellows have made their estimated payments in the past.
 * The first and most proper way is to carefully calculate your taxable income and make payments based on that figure. This basically amounts to doing your taxes for the year (including deductions, rebates, etc.) earlier than you normally would. The tricky part here is knowing how much is withheld from any other earnings you may have, but that isn't too hard to estimate, and this approach does a good job of minimizing the money exchanged between you and the government.
 * Another method is easier if you're okay with overpaying and then getting a substantial return. This is simply using the GK-12 stipend as your taxable income (less the standard //single// deduction--even if you're married), completing the worksheet included in the 1040-ES, and then paying 1/4 the resulting liability for each quarter you are a fellow. This method basically removes the complexity of earnings and withholdings from other sources (your GTF position, investments, spouse, etc.) and deductions and exemptions. This ensures that you have payed enough tax on your GK-12 income, but more than likely, you will have payed too much.
 * Finally, you can ignore the estimated payments and just pay the associated penalty. The penalty is on the order of $100--200, so you get to decide how much your time and effort are worth. If you can invest the money you would have payed in estimated taxes and earn enough to cover the penalty, then this way has absolutely no drawbacks. Also, please share your investment strategies with the rest of us!

Helpful Hints

 * You should not use the 1098-T form when filling out your taxes. The way scholarship and tuition are reported for fellows is wonky, and this form is incorrect since we don't actually pay any tuition. While including this information will increase your return, your probably shouldn't (there is at least one former fellow who was audited a few years later for doing so).
 * In the state of Oregon, you can subtract rent from your taxable scholarship income!