Taxes fo Med Students

[HelloGoodbye]

Hi everyone,

I was curious if any other students have experience with filling out income tax returns when you are living on student loans.

I made a whooping $150 last year as a lab attendant and my wife who is in PA school didn't work at all. Like most med students we live off of our loans and scholarships. How do you do your taxes with numbers like this? I am pretty sure you still need to even if you have zero income, because FAFSA asks if you filed a returen. This is a new experience for me since I worked all throughout college.

Any advice?

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[dr zaius]

You should get a form from your school in the mail (it's a 10-something or other I think. 1099 maybe?). Once you get that you can go onto the IRS website or H&R block, quickbooks, etc and file your taxes. It doesn't take long at all.

 

[HelloGoodbye]

We did get both of the 1098T forms (I think thats what it is)...do you essentially use this as your W2?

 

[LossForWords]

I think it's the 1098-T. You can just use the 1040 EZ form for your taxes and it takes very little time.

 

[235009]

were any taxes withheld from your paycheck? I'm assuming the answer is no. If that's the case then there is no reason for you to file a tax return because you made more than an order of magnitude less than the standard deduction (the amount of money you're allowed to not pay taxes on)

you are not required to file taxes for FAFSA. there is an option for "i will not file" when filling out your taxes. choose that and you're set in that respect

the 1098T is a tuition statement ...it shows you how much you paid in tuition last year which you can claim as a deduction (up to a very low limit).

the point of a tax return is either to get back taxes you overpaid or to pay taxes you owe that were not withheld. since you (probably) didnt pay any taxes and will certainly not owe any you can pass on filing taxes.

 

[redpanda]

We did get both of the 1098T forms (I think thats what it is)...do you essentially use this as your W2?

W2 is for earned income. Loans as far as I know are not earned income. You use your 1098T form to fill in some lines on one of the supplementary forms which will feed into like one line on your 1040. If you had significant income and paid significant tuition, you'd then use this supplementary form to figure out your eligibility for one of the tax breaks for education expenses for >half-time graduate students (max. $2000 tax credit 🙂). All of you first-years like me who worked last year, make sure you take the tax credit if you are eligible. It's like gold.

Tax credit example (hypothetical numbers):
Taxable income: $40,000
Tax liability (before calculation of education breaks, standard single-filer type of deductions): $5,000
Taxes withheld already+any estimated tax paid: $7,000
-Grad student status >half time: $0
Taxes you must pay by 4/15: $5000-$7000 = -$2000 = tax refund!

+Grad student status >half-time: -$2000
Taxes you must pay by 4/15: ($5000-$2000)-$7000 = -$4000 = much bigger tax refund!

 

[pkwraith]

Not much to add, except just use the 1040 EZ. If you're super lazy, I guess you can use one of the online sites (they file your your federal returns for free) which might be overkill for the EZ. I had decent success with online site for the last five years because I was forced to file 1040.

 

[HelloGoodbye]

were any taxes withheld from your paycheck? I'm assuming the answer is no. If that's the case then there is no reason for you to file a tax return because you made more than an order of magnitude less than the standard deduction (the amount of money you're allowed to not pay taxes on)

you are not required to file taxes for FAFSA. there is an option for "i will not file" when filling out your taxes. choose that and you're set in that respect

the 1098T is a tuition statement ...it shows you how much you paid in tuition last year which you can claim as a deduction (up to a very low limit).

the point of a tax return is either to get back taxes you overpaid or to pay taxes you owe that were not withheld. since you (probably) didnt pay any taxes and will certainly not owe any you can pass on filing taxes.

It's funny they took out 89 cents from federal and $5.10 from state....I really don't care about getting the dollar back I just want to make sure that I Uncle Sam won't be after me!

Thanks for the advice everyone!

 

[dyeguy21]

Also, be careful in PA...Philadelphia requires you to submit a net profit tax on your scholarship money, even when the result comes out to zero owed. This came as news to me and my tax accountant form my home state when I was almost audited/subpoenaed for failure to file and pay back taxes.

 

[type b pharmD]

Anyone over age 24 who has earned some income from wages should be sure to file even if they did not have any withheld, in order to get the earned income tax credit (~$300). That is, if you didnt pay any taxes, but you did work, the govt owes you a check for $300 or so just for participating in the workforce. Also remember loans are not income, but scholarships may be considered that for filing purposes.

 

[235009]

Anyone over age 24 who has earned some income from wages should be sure to file even if they did not have any withheld, in order to get the earned income tax credit (~$300). That is, if you didnt pay any taxes, but you did work, the govt owes you a check for $300 or so just for participating in the workforce. Also remember loans are not income, but scholarships may be considered that for filing purposes.

thanks for this...i wasn't aware that you can claim this credit if you don't pay any taxes at all....however you don't automatically get $300 as you say....

from turbotax:

If you don't have any qualifying children, your maximum credit is $464. To get this amount, you must:
- Married: have income between $6,050 and $12,700
- Not Married: have income between $6,050 and $7,600

Your credit decreases the further away your income gets from these income ranges. If you don't have any earned income at all, your credit will be $0. Likewise, if your income is above the maximum income allowed for the credit, your credit will be $0.

i made twice as much as OP last year and turbotax says the government owes me $29 lol ...i mean i'll def send it in...it's better than nothing....just wanted to clear that up. also the minimum age is 25 not 24

 

[type b pharmD]

thanks for this...i wasn't aware that you can claim this credit if you don't pay any taxes at all....however you don't automatically get $300 as you say....

from turbotax:


i made twice as much as OP last year and turbotax says the government owes me $29 lol ...i mean i'll def send it in...it's better than nothing....just wanted to clear that up. also the minimum age is 25 not 24

Cool, thanks for clearing this up ! I believe i'm owed about $300, but i made >$5000 last year, I do believe it depends on your income.