Nothing's Certain But Papers & Taxes: Grad Student Taxes 101
Written by Serigne Thiam, Graduate Assistant for the Graduate College.
Disclaimer: The information provided here is for general guidance purposes only. Tax filing can vary per individual. If you have specific questions about your situation, we strongly encourage you to consult a certified tax or financial advisor.
Another important season is upon graduate students: tax season. Filing taxes and managing your finances are forms of “adulting” that can be daunting and seemingly insurmountable for graduate students. These fiscal topics can be especially overwhelming considering your coursework, research, and social life. You face many unique challenges that may not have been present during undergrad, such as understanding student loan interest and how stipends or fellowships may impact your taxes and financial portfolio.
Nevertheless, mastering the art of financial wellness is a pivotal step towards establishing yourself as a functioning member of society and achieving financial stability. Plus, you’ll be surprised at the plethora of ways you can keep more money in your pocket. April 15 is Tax Day, but why wait till then to get started? We spoke with James Tenney, UC International Services associate director and compiled a list of tips to simplify your tax season and keep your hard-earned dough in your pocket.
Gather The Essentials
Always keep track of important tax and financial documents, like your UC 1098-T form (which reports payments received for qualified tuition and related expenses, such as scholarships) and the W-2 from your job. Your 1098-T form is available in Catalyst. Make sure to hold onto receipts for any of your education expenses like books or online software – you may be able claim these expenses when you file your taxes.
Filing Options
Having a variety of tax filing options can be overwhelming, so it’s important to do research and use the platform right for you, whether that be a paid service like H&R Block or free services provided by the government. You can also schedule an appointment with a tax preparer should you feel more comfortable interacting with a professional.
For international students, filing taxes will depend on their tax residency and whether you received US income. International students have access to Sprintax RETURNS, a software package designed for you to file your taxes for free.
What's Taxable Income?
Simply put, most income is taxable including the income you earned from a fellowship or graduate assistantship. Depending on your type of employment, you may receive a W-2 documenting your income. However, fellowships can be a bit tricky regarding taxation. Funds used for tuition or other eligible educational expenses may be tax-free, whereas living expenses are not.
“All U.S. income is potentially taxable on some level,” said Tenney. “International students should be mindful of how long they’ve been in the U.S., what country they’re from, and their immigration status history, as these factors determine their tax residency.”
Tax Credits
These are tax incentives which allow eligible taxpayers to reduce the income tax they owe. Here are a few you might qualify for:
Lifetime Learning Credit (LLC): Credit up to $2,000 for graduate students enrolled in eligible institutions who pay tuition and other related expenses.
American Opportunity Tax Credit (AOTC): Usually reserved for undergraduates, but graduate students may still enjoy up to $2,500 in tax credits.
Earned Income tax Credit (EITC): If you work part-time or earn a lower income, you could claim a benefit of up to $7,430, especially if you have dependents.
Child and Dependent Care Credit: You can be credited for childcare expenses up to $3,000 for one dependent or $6,000 for two or more.
Manage Your Refund Well
If you receive a tax refund after filing, don’t blow it! People have a tendency to blow newly found money, but this isn’t beneficial in the long run. Depending on your tax situation, you potentially could be refunded thousands of dollars, so use it wisely. Consider paying off outstanding loans or supplementing your emergency fund. Having a plan will help you in resisting the temptation to splurge!
Tax Information for International Students
If you are in F-1/F-2 and J-1/J-2 status, you must file a tax return even if you had no U.S. income in 2024. You can start your tax return by submitting the Annual Tax Return (Report) Assistance eForm in iBearcatsGlobal. UC International will review your information and let you know of the next steps!
Filing your taxes and managing your finances as a graduate student isn’t just about getting through the semester but developing habits that will benefit you long after grad school. Stay informed, organized, and proactive so you can take control of your financial future and cultivate a very attractive tax refund. Here’s to a joyously successful semester and a stress-free tax season!