Highlights from the Graduate Student Tax seminar... since most of you did not go...

First and most important, all this information was delivered by H&R
consultants and is only advice. They took all personal questions and
situations case by case, and were very helpful. If something goes wrong they are not responsible was the idea....

Barbara Pleva represented the school, the Rutgers system, but most
applies for students from both departments. She is very helpful, so be nice to her...

This information is a guide to help clarify some common misconceptions and is advice. Ask the IRS, school employees, or an accountant for
professional advice. This is merely a restatement of selected items
mentioned at the Tax Seminar. So here the scoop...

You must pay Federal taxes!!!!!! By not paying taxes you are breaking
the law, even if you don't pay taxes, at least file a tax return according to the reps. It shows effort, and this may work in your favor if you get audited. Even those of you who are under the $7500 poverty line for the 1997 year. State taxes are a separate issue, and are school/department dependant.

You can get audited, there is not a time limitation for auditing of taxes. And they have gone through other school's records and gone after grad students going back 20 years for what they owed and the penalty and interest charges. Other students, probably a majority have gotten away without paying taxes. This is a risk some students take.

You are responsible for Federal Tax. You pay tax on whatever box #1 on
your W-2 says, minus the cost of tuition, fees, books, and mandatory
materials for your education (these are questionable so ask if you are
curious). Computers and not mandatory, including Sega Play Stations. Housing, food, clothing, beer, etc are living expenses and are TAXABLE. Expenses reimbursed such as tuition, or reimbursed fees are then taxable as they were not paid from your money, but the reimburser's cash. All items used as deductions need to have proof as a receipt or other method of documentation.

If you did not get a W-2 back from the school, that is your problem, not
the schools apparently... Get one as soon as possible. If you are on
Fellowship you can use the letter stating your income as your W-2, but
remember the tax year is not the same as the school year, it splits about 1/4 Fall and 3/4 Spring semester.

If you did NOT have taxes taken out, it is reckoning day. You still owe tax and can ask for an extension to pay or try to contact the IRS for
alternatives, such as a payment plan.

Gross income - (Tuition/fees/books) - taxes paid(if any) = Taxable income.

Taxable income is then taxed at 15% in most of our cases.

State income tax and social security are still a question being debated.
So get back to us later. Rutgers seems to pay, UMDNJ does not seem to pay, but who is right!?!?! It seems to vary with the employer at this time.

Solutions

If you want to change your W-4 to get taxes taken out, you can at any
time. Contact payroll and resubmit a W-4. This will help for next year.

If you are in a real bind try to get a loan from Financial Aid (should
have gone to our seminar). Financial Aid is not Taxable, because it is a
loan....