“Is my fellowship taxed?” “How do I determine my residency for tax purposes?” These are just a couple of the important questions answered in Taxes 101 for Graduate Students.

Resident tax gurus James Black, senior academic professional in the Office of Graduate Education; Jessica Dunn, international tax compliance specialist in Global Human Resources; Rob Sullivan, business analyst in the Bursar’s Office, teamed up to answer graduate students’ most commonly asked questions when it comes to doing taxes. 

Staff are not professional tax accountants or preparers. The following is for informational use only. 

What are income taxes? “Essentially, when you earn income, the government (both the state and federal government) is generally owed a tax on that income. It’s called income tax,” said James Black, senior academic professional in the Office of Graduate Education. “Basically, if taxes withheld are greater than the taxes you owe, you’re going to get a refund back. If your taxes withheld are less than your taxes owed, then you’re going to have a tax bill, and you will have to pay some money through that tax return process.” 

In general, how does it work? “As you get a paycheck, there’s a portion of your paycheck that’s held back and prepaid to the state and federal government, in terms of your income tax,” said Black. “That’s really important when it comes time to file your tax return when you’re reporting how much income you have and how much tax you may have had withheld.”

What is the process? “Your income can be reported in a number of ways based on the type of income that it is,” said Black. “After that calendar year concludes is when you would prepare and file your income tax return. You collect all of that paperwork; you report all of your income to the government and any other relevant financial information that may affect how much money you owe in taxes. Then, there’s a math problem that determines whether you’re going to get a refund through that tax return process, or you may have a tax bill where you need to pay some money to finish paying your taxes that are owed on that money throughout the year.”

What are common tax forms for graduate students? 

• W-2: “For W-2 pay, that’s where payroll is going to report your income that taxes may have been withheld on,” said Black. “If you’re hired as a GRA or GTA and you’re employed on campus, you will generally be paid through payroll, and you will be issued a W-2.” 

• 099: “Interest income, or other types of income you may make, will generally be reported on a 1099 form, and there are many different flavors of a 1099 based on the type of income that it is,” said Black. “In general, on a 1099, no tax is withheld. If that is taxable income, you need to keep track of that. Keep in mind that when you go to file your tax return, you will be required to pay that tax at that time.” 

• 1042-S: “For scholarship and fellowship income for our international students, generally, there is going to be a 1042-S that is produced for you to report that income,” said Black. 

In addition, Dunn explained that people who are paid through payroll for a job but have a tax treaty will also get a 1042-S. “That [form] can also be necessary if you received money back from the bursar, meaning all of your tuition was paid and there was still some money left over, so they gave you a check or they deposited it into your account,” said Dunn. “Also, if you received any prizes or awards that didn’t go directly toward your tuition, but you just got the money to do with as you wanted, you would receive a 1042-S.” 

How do I determine my residency status for tax purposes? “If you are international, meaning you have a foreign passport, the first thing you are going to want to do is figure out whether you are considered a resident or nonresident for tax purposes, and that will determine how you complete your taxes,” said Dunn. 

According to Dunn, “The easiest way to determine [if you are a resident or nonresident] is to use GLACIER. If you are earning income from Georgia Tech, you have likely already done this, and you have put in your immigration information and determined whether you are a resident or nonresident,” said Dunn. “The thing to keep in mind is this can change based on how long you have been here, so if you have been at Tech for a while, you may want to go back and double-check that before you do anything.” 

Do I need to file income taxes if I made less than a certain amount? “The process is different if you earned money or if you didn’t,” said Dunn. “For U.S. citizens, you really don’t have to do anything if you didn’t earn money.”

“The same is not true for nonresidents. Even if you earned nothing in the U.S. in 2022, there’s still one form that you’re supposed to do, and that is the 8843,” said Dunn. “It’s very simple; it doesn’t have anything to do with numbers. It’s really just to say, ‘Hi, I’m here in the U.S., and I’m a nonresident. Please don’t tax my worldwide income.’ Meaning, if you have any kind of income in another country, it will keep the U.S. from bothering that income. That’s important to do.” 

Black explained that U.S.-based taxpayers who made less than $12,950 (single return) or $25,900 (joint return) don’t have to file a tax return. “We always recommend that you do file a tax return because if you did make income, and you had taxes withheld, more than likely you’re going to get a refund,” said Black. “If you don’t want to bother with your tax return, that’s fine, but you may be leaving some money out there in the government’s checking account that you may be entitled to, so make sure that you file your taxes if you made any income.”

What are tax deductions and credits? “You may have heard of ‘income tax reductions,’” said Black. “Essentially, that will reduce your taxable income. A tax credit results in a dollar-for-dollar reduction in the taxes that you pay. If you owe $2,000 and you got a $1,000 tax credit, then you would end up owing $1,000. The Bursar’s website has some information about common tax credits for educational-related tax credits at www.bursar.gatech.edu/content/tax-credits.” 

Will my fellowship be taxed? “Many fellowships are going to be providing you with income that is going to be taxed,” said Black. “There can also be deductions to offset a lot of that income. I will refer you to the website: http://www.pfforphds.com. There’s information there about some tax situations related to fellowships where you will want to dig into that because you could potentially have a pretty big tax bill if you weren’t planning for that while you were receiving your fellowship income. If you had a stipend paid through the Bursar’s office because you’re on a fellowship, that could be taxed, and you might have a big tax bill to pay.” 

How do I file my tax return (U.S. citizens and residents)? “There are many different versions of tax prep software out there that will walk you through all of the different deductions and credits,” said Black. “In general, the advice we give to U.S. citizens and residents for tax purposes is to trust the software. Be an intelligent consumer of the tax prep software. Make sure you trust the folks that are going to be preparing your taxes. They’re going to get a lot of sensitive information, like your social security number, and you will want to make sure that you’re working with somebody that is not trying to scam you. Be an intelligent consumer and trust the software that’s out there to help you file your taxes.” 

How do I file my tax return (nonresidents)? “We provide nonresident alien students a program called Sprintax,” said Dunn. “You will probably see ads for tax preparation software, but the important thing to remember is that if you’re a nonresident, most of those that you see advertised will not work for you. They’re not designed for nonresidents. They will do your taxes incorrectly. I see a lot of people using them because it gives you a bigger refund, and that seems really great. The IRS may come back later and request that you pay that. It’s really important to use the correct program. Georgia Tech does provide Sprintax. There is an e-form in iStart, and you can go in and request that.” 

Do I have to pay a fee to file my taxes? “If your income is below a certain threshold, you should be able to file your taxes for free,” said Black. “Here’s a URL for the IRS website: www.irs.gov/filing/free-file-do-your-federal-taxes-for-free. There’s more information on the IRS website about how to access those free filing taxes for your federal income taxes. When you file your state taxes, generally, there’s going to be some charges associated with filing it with the state.”

What is the deadline? “The deadline to file your 2022 tax return is the 18th of April,” said Black. “If you find that you need more time to prepare your income tax return, it is possible to file and request an extension with the IRS. One really important thing to know about this is if you owe money to the IRS to pay taxes, you can’t get an extension to pay that bill. You need to pay that bill by that deadline of the 18th of April.” 

Who can I ask for help? “For questions, I am always available,” said Dunn. “Go to asc.gatech.edu and submit a ticket. That’s the best and quickest way to go.” 

What are some resources I can use to help me? 

•    Educational-Related Tax Credits: www.bursar.gatech.edu/content/tax-credits
•    Personal Finance for Ph.D.’s: http://www.pfforphds.com
•    IRS Free File: www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
•    Tax Treaty Benefits: www.irs.gov/individuals/international-taxpayers/tax-treaties
•    LinkedIn Learning: www.linkedin.com/learning/finance-foundations-income-taxes-2
•    Taxes 101 recording: www.grad.gatech.edu/taxes101
•    Submit a Help Ticket: www.asc.gatech.edu
•     Tax Resources for International Students and Scholars: www.isss.oie.gatech.edu/content/tax-resources
•    Publication 970: Tax Benefits for Education (for use in preparing 2022 returns): www.irs.gov/pub/irs-pdf/p970.pdf