Put general information on taxes here. (Lia)

Turbotax and Taxact are both free tax services that will allow you to pay or receive your refund electronically. You can submit your federal tax return for free, but there is usually a fee if you want to submit your state taxes with these services. You'll have (at least) a W-2 from Columbia University and a 1098-T if you have scholarships or grants.

However, New York State does have a free e-file program, you just have to use the right service. http://www.tax.ny.gov/pit/efile/freefile_eligibility3.htm shows which on-line services they are. If you earned income in another state, you'll have to file there too and in general those services might not be free (check before you start). Each state has different agreements between the tax preparation software, so finding the right software is really key.

If you don't have many deductions or outside income to report (e.g. tutoring, interest) you can easily fill out a 1040 or 1040 EZ by hand. These forms are all available for free on www.irs.gov

Note that if you are an international student, the above may not apply to you. (Yuan)

First and Second year support

First and second year students are paid partially on a stipend, from which taxes are not automatically withdrawn. Be sure to set aside some taxes for the end of the year. Note that this may not be true for international students.

To wax eloquently on this situation: it's not at all clear why, but the university has determined that the only legitimate educational expense they will report to the IRS is tuition. This means that any fellowship you get above-and-beyond tuition is considered a "stipend" and is taxable UNLESS you spent that money on educational expenses which include books, computers used mostly for educational purposes, field trips, required educational expenses, etc. Food and lodging are not considered educational expenses. Keeping track of this is entirely your responsibility because Columbia doesn't report how much money it gave to you to the government as the rules essentially state that stipend grants are not considered normal "income", though as soon as they enter your bank account they are taxable income since this is no gift. The Federal and State Government, in principle, will only discover this amount through reporting by your financial institution (e.g., the direct deposit into your account). If they choose to audit you and you did not report the income, you're on the hook for whatever taxes you didn't pay unless you can prove that the expenses were tax exempt. If you wish to play it safe, deduct ~15% of your stipend check and deposit it into a separate account. Do your taxes as normal and report the amount of the stipend check as "additional unreported income" when you do your taxes. Make sure to report all educational expenses carefully and if it adds up to more than the standard deduction (which is ~5300 as of 2012) you will end up filing an extensive 1040. Even so, unless you had some other income that was taxed, you will likely have an "amount due" to the Federal and State Governments at the end which, if you were generous in your accounting, will be less than the amount you set aside.

N.b. This is really awful of Columbia University. In comparison, other universities simply report that the expense associated with attending the university is considerably higher so that the full amount of your fellowship is reported to the Federal Government as being tax-exempt. Such techniques put the onus of the audit on the university rather than individual. Would that Columbia would be so nice. It is unclear why Columbia arranges its taxes in such a way. It may be because they were audited and got in trouble. It may be because their accountants think that this is a clever way of making sure that fellowship students aren't counted as employees. It may be for even more insipid or nefarious reasons. It's unclear. What is clear is that they have made it tantalizingly easy for American 1st and 2nd year graduate students to not report this income, though it is not entirely clear to me and the tax accountants and lawyers with whom I discussed this whether a case could be made that you actually do not owe any taxes. The rules are ambiguous.

Third year and beyond

Most Graduate Research Assistants and "Addcomp payees" (e.g. outreach volunteer payments, incidental department employment, etc.) are considered employees of the university and therefore all taxes will be deducted from your check according to the W-4 and I-9 forms you fill out upon arriving at the university. Reimbursements are not income and should neither have taxes withheld nor should they appear on end-of-the-year W2s. (If you see anything like this contact Millie immediately). Occasionally, taxes will not be withheld from teaching fellowships, but these are normally only a few thousand dollars, and they'll send you a W-2 for these which makes the tax reporting easier.

Note that Columbia has a general policy of not sending W2s in the mail but instead you get to look at them on-line through the my.columbia.edu portal. After loggin in, click on the "Faculty and Staff" link at the top and navigate to where those documents are stored.

Outside fellowships and stipends

If you are on an outside grant (e.g. NSF or a NASA grant), you will receive stipend checks from which taxes are NOT automatically withdrawn. Be sure to set aside some taxes for the end of the year.

International Students

International students cannot use most of the free services available to US citizens, including Turbotax and NY state e-file program until you are in the country for five years and then are considered eligible for resident filing (though you are not technically a permanent resident!). ISSO offers free software for Federal Tax return and organizes tax workshops for NY state tax return every year for international students. The workshop is worth attending especially if you are a first year. (Yuan)

Outside Income and Deductions

If you donate to a charity, don't forget to report it for a deduction on your taxes!

Should we report facilities fees as an educational expense? Why or why not?

Most graduate students will not need to do anything more than the standard deduction (~$5300) unless you had a child, bought a house, had en enormous medical expense, started a business or did something that requires itemization. Donation to charities unless it is in the realm of thousands of dollars a year will not likely affect your taxes. Same goes for educational expenses. By all means, add up your deductions to see if itemization will work for you, but for most graduate students the standard deduction will be higher. Additionally, don't forget that the sales tax in New York City which is, as of 2012 8.875% can be entered into the itemized deductions worksheet and often counts as a sizable deduction (upwards of a $1000 for many graduate students). Online tax prep software will do this for you.


Note that if you took out exorbitant student loans at any point, the interest on those loans will be credited against your tax burden. This is also true for interest on a home mortgage, but if you own a home in graduate school at Columbia you are a pretty special person.