Taxes taxes and Look more taxes!

General Discussion for SMART Scholarship Recipients
Concerned

Taxes taxes and Look more taxes!

Post by Concerned »

For previous recipients. Can you give new awardees a bit more info about how you filed your taxes?

Assuming this stipend is your only income, what percentage should we expect to pay in taxes?

How did you calculate your estimated quarterly taxes?

Guest123

Re: Taxes taxes and Look more taxes!

Post by Guest123 »

Concerned wrote:For previous recipients. Can you give new awardees a bit more info about how you filed your taxes?

Assuming this stipend is your only income, what percentage should we expect to pay in taxes?

How did you calculate your estimated quarterly taxes?
I would have to go back and check how exactly I did it, but it was a decent chunk. As far as the estimated quarterly, there's a tax form (1040ES I think?) that you go through and at the end it'll have you calculate how much you should pay quarterly.

Taxesss

Re: Taxes taxes and Look more taxes!

Post by Taxesss »

Concerned wrote:For previous recipients. Can you give new awardees a bit more info about how you filed your taxes?

Assuming this stipend is your only income, what percentage should we expect to pay in taxes?

How did you calculate your estimated quarterly taxes?
I made approximately $32,000 this year and ended up owing around $8,000. So I suggest saving a third of every paycheck.

kbl2017
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Re: Taxes taxes and Look more taxes!

Post by kbl2017 »

Taxesss wrote:
Concerned wrote:For previous recipients. Can you give new awardees a bit more info about how you filed your taxes?

Assuming this stipend is your only income, what percentage should we expect to pay in taxes?

How did you calculate your estimated quarterly taxes?
I made approximately $32,000 this year and ended up owing around $8,000. So I suggest saving a third of every paycheck.
8000???? That seems extremely high.

kbl2017
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Re: Taxes taxes and Look more taxes!

Post by kbl2017 »

Also. How the heck do I save 1/3rd when my housing costs almost 1/2 of my income? (In LA so no i cant find cheaper housing.)

Concerned

Re: Taxes taxes and Look more taxes!

Post by Concerned »

Guest 123. If I used the ES form it estimates around $4000.

We are not self employed so we don't owe social security or medicare as our stipend isn't considered for work. If that's the case it means we are taxed at 10% for the first 10,000 and 15% for the rest. Then state taxes are taken out on top of that right?

CSMajor

Re: Taxes taxes and Look more taxes!

Post by CSMajor »

I've save approximately 25% (Yes thats a little too much to save) just because I don't know what to expect this tax season and want to make sure I have everything covered.

I've estimated taxes to be around the $4,000-$5,000 range -- also, remember with 1099s if SMART labels the income as self employment income then we can deduct every expensive we've taken for smart and our education. If it's just labeled as other income then I don't think we can deduct anything from it.

Deathandtaxes

Re: Taxes taxes and Look more taxes!

Post by Deathandtaxes »

Concerned wrote:Guest 123. If I used the ES form it estimates around $4000.

We are not self employed so we don't owe social security or medicare as our stipend isn't considered for work. If that's the case it means we are taxed at 10% for the first 10,000 and 15% for the rest. Then state taxes are taken out on top of that right?
Is that $4000 the estimate considering both federal and state taxes? $4000 seems about right for just federal, but is very low if it is both. $8000 sounds a bit high to me, I made about $35000 through SMART last year and my obligation was about $7000 for both state and federal, so ~20%. Perhaps Guest123 needed to file as a dependent or had some other tax situation.
kbl2017 wrote:Also. How the heck do I save 1/3rd when my housing costs almost 1/2 of my income? (In LA so no i cant find cheaper housing.)
"In this world nothing can be said to be certain, except death and taxes."

As I said above for me it has been more like 1/5 for me, so you might not have to worry. I would seriously reconsider your housing situation though. 50% of gross income is severally over what is generally suggested for housing. Current recommendations suggest mortgage payments should be no more than 30%. If you want to be a homeowner one day, rent should be lower because in theory you should be saving the difference towards a down payment.

CSMajor

Re: Taxes taxes and Look more taxes!

Post by CSMajor »

Deathandtaxes wrote:
Concerned wrote:Guest 123. If I used the ES form it estimates around $4000.

We are not self employed so we don't owe social security or medicare as our stipend isn't considered for work. If that's the case it means we are taxed at 10% for the first 10,000 and 15% for the rest. Then state taxes are taken out on top of that right?
Is that $4000 the estimate considering both federal and state taxes? $4000 seems about right for just federal, but is very low if it is both. $8000 sounds a bit high to me, I made about $35000 through SMART last year and my obligation was about $7000 for both state and federal, so ~20%. Perhaps Guest123 needed to file as a dependent or had some other tax situation.
kbl2017 wrote:Also. How the heck do I save 1/3rd when my housing costs almost 1/2 of my income? (In LA so no i cant find cheaper housing.)
"In this world nothing can be said to be certain, except death and taxes."

As I said above for me it has been more like 1/5 for me, so you might not have to worry. I would seriously reconsider your housing situation though. 50% of gross income is severally over what is generally suggested for housing. Current recommendations suggest mortgage payments should be no more than 30%. If you want to be a homeowner one day, rent should be lower because in theory you should be saving the difference towards a down payment.
Looks like my 25% will give me a nice cushion. I live in a state with pretty low state taxes so I’m probably looking at 17-18%. What percentage was taken out for state taxes for you?

kbl2017
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Re: Taxes taxes and Look more taxes!

Post by kbl2017 »

Deathandtaxes wrote:
Concerned wrote:Guest 123. If I used the ES form it estimates around $4000.

We are not self employed so we don't owe social security or medicare as our stipend isn't considered for work. If that's the case it means we are taxed at 10% for the first 10,000 and 15% for the rest. Then state taxes are taken out on top of that right?
Is that $4000 the estimate considering both federal and state taxes? $4000 seems about right for just federal, but is very low if it is both. $8000 sounds a bit high to me, I made about $35000 through SMART last year and my obligation was about $7000 for both state and federal, so ~20%. Perhaps Guest123 needed to file as a dependent or had some other tax situation.
kbl2017 wrote:Also. How the heck do I save 1/3rd when my housing costs almost 1/2 of my income? (In LA so no i cant find cheaper housing.)
"In this world nothing can be said to be certain, except death and taxes."

As I said above for me it has been more like 1/5 for me, so you might not have to worry. I would seriously reconsider your housing situation though. 50% of gross income is severally over what is generally suggested for housing. Current recommendations suggest mortgage payments should be no more than 30%. If you want to be a homeowner one day, rent should be lower because in theory you should be saving the difference towards a down payment.
I literally cannot reconsider my housing situation, trust me. I've looked everywhere and I know the 1/3 rule. Short of bunking in a 4+ person room with 1 bathroom nothing around here is cheaper than what I'm paying. I could probably pay about $150 less per month if I commuted but then I'd need to pay for a car/gas/city parking which equals out.

The $4000 federal + state taxes makes a lot more sense to me than $8000. For me state taxes are less than $1000 which makes my income tax right around 15%. I've been putting 20% directly into a savings account but I've been extremely hopeful that they won't need it all as I still need to rent a car to get to my SF this summer.

Deathandtaxes

Re: Taxes taxes and Look more taxes!

Post by Deathandtaxes »

CSMajor wrote:Looks like my 25% will give me a nice cushion. I live in a state with pretty low state taxes so I’m probably looking at 17-18%. What percentage was taken out for state taxes for you?
It pretty much broke down as $4500 federal and $2500 state for me. My state has a middle of the road income tax rate of something like 6%.
kbl2017 wrote:I literally cannot reconsider my housing situation, trust me. I've looked everywhere and I know the 1/3 rule. Short of bunking in a 4+ person room with 1 bathroom nothing around here is cheaper than what I'm paying. I could probably pay about $150 less per month if I commuted but then I'd need to pay for a car/gas/city parking which equals out.

The $4000 federal + state taxes makes a lot more sense to me than $8000. For me state taxes are less than $1000 which makes my income tax right around 15%. I've been putting 20% directly into a savings account but I've been extremely hopeful that they won't need it all as I still need to rent a car to get to my SF this summer.
Believe me, I get it. Housing rates are pretty high where I am, too. For me, it made more sense to tough it out with 6 guys so that I had the extra chunk to put into savings. I guess it kind of comes down to the personal preference of whether your willing to sacrifice a bit more now in order to be ahead later. $1000 seems real low for LA income taxes though. Won't you have like a 6% tax rate based on the full year stipend?

kbl2017
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Re: Taxes taxes and Look more taxes!

Post by kbl2017 »

Deathandtaxes wrote:
CSMajor wrote:Looks like my 25% will give me a nice cushion. I live in a state with pretty low state taxes so I’m probably looking at 17-18%. What percentage was taken out for state taxes for you?
It pretty much broke down as $4500 federal and $2500 state for me. My state has a middle of the road income tax rate of something like 6%.
kbl2017 wrote:I literally cannot reconsider my housing situation, trust me. I've looked everywhere and I know the 1/3 rule. Short of bunking in a 4+ person room with 1 bathroom nothing around here is cheaper than what I'm paying. I could probably pay about $150 less per month if I commuted but then I'd need to pay for a car/gas/city parking which equals out.

The $4000 federal + state taxes makes a lot more sense to me than $8000. For me state taxes are less than $1000 which makes my income tax right around 15%. I've been putting 20% directly into a savings account but I've been extremely hopeful that they won't need it all as I still need to rent a car to get to my SF this summer.
Believe me, I get it. Housing rates are pretty high where I am, too. For me, it made more sense to tough it out with 6 guys so that I had the extra chunk to put into savings. I guess it kind of comes down to the personal preference of whether your willing to sacrifice a bit more now in order to be ahead later. $1000 seems real low for LA income taxes though. Won't you have like a 6% tax rate based on the full year stipend?
I don't think the 3 girl roommates and one bathroom thing is worth the possibility of saving $300-$400. I 100% wouldn't make it through my classes without having a place that was quiet to study. I have 5 housemates as it is and that's pretty rough.

I'm also taxed for Connecticut as I haven't claimed residency here yet, I'm not sure when/if I have to before next year but Connecticut has weird tax laws for low income and full time students. Max rate would be 5% but generally it's lower until you hit 50k. I may have to change it in which case yeah it'd be around 6% for LA.

CSMajor

Re: Taxes taxes and Look more taxes!

Post by CSMajor »

kbl2017 wrote:
Deathandtaxes wrote:
CSMajor wrote:Looks like my 25% will give me a nice cushion. I live in a state with pretty low state taxes so I’m probably looking at 17-18%. What percentage was taken out for state taxes for you?
It pretty much broke down as $4500 federal and $2500 state for me. My state has a middle of the road income tax rate of something like 6%.
kbl2017 wrote:I literally cannot reconsider my housing situation, trust me. I've looked everywhere and I know the 1/3 rule. Short of bunking in a 4+ person room with 1 bathroom nothing around here is cheaper than what I'm paying. I could probably pay about $150 less per month if I commuted but then I'd need to pay for a car/gas/city parking which equals out.

The $4000 federal + state taxes makes a lot more sense to me than $8000. For me state taxes are less than $1000 which makes my income tax right around 15%. I've been putting 20% directly into a savings account but I've been extremely hopeful that they won't need it all as I still need to rent a car to get to my SF this summer.
Believe me, I get it. Housing rates are pretty high where I am, too. For me, it made more sense to tough it out with 6 guys so that I had the extra chunk to put into savings. I guess it kind of comes down to the personal preference of whether your willing to sacrifice a bit more now in order to be ahead later. $1000 seems real low for LA income taxes though. Won't you have like a 6% tax rate based on the full year stipend?
I don't think the 3 girl roommates and one bathroom thing is worth the possibility of saving $300-$400. I 100% wouldn't make it through my classes without having a place that was quiet to study. I have 5 housemates as it is and that's pretty rough.

I'm also taxed for Connecticut as I haven't claimed residency here yet, I'm not sure when/if I have to before next year but Connecticut has weird tax laws for low income and full time students. Max rate would be 5% but generally it's lower until you hit 50k. I may have to change it in which case yeah it'd be around 6% for LA.

I’m actually in the same boat. My rent takes about 40% of my monthly income — but I feel that it balances out because I don’t have a car payment or any bills that take more than $100/Mo so I’m left with a healthy 50% of my stipend for food, gas, and savings.

Guest11

Re: Taxes taxes and Look more taxes!

Post by Guest11 »

What happens if you just don't file taxes?
Personally, I live in one of the most expensive places in the US for school (not by choice) and I think it's grossly unfair that they allocate the same stipend for me as someone living in a state with much lower living costs. Obviously the taxes are going to hit them much less than they are me.

kbl2017
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Re: Taxes taxes and Look more taxes!

Post by kbl2017 »

Guest11 wrote:What happens if you just don't file taxes?
Personally, I live in one of the most expensive places in the US for school (not by choice) and I think it's grossly unfair that they allocate the same stipend for me as someone living in a state with much lower living costs. Obviously the taxes are going to hit them much less than they are me.
It is unfair. But since taxes are separate from SMART you can get into legitimate government trouble. You could end up owning almost 50% more in taxes. I imagine it also could cause problems when getting hired after school.

CSMajor

Re: Taxes taxes and Look more taxes!

Post by CSMajor »

Guest11 wrote:What happens if you just don't file taxes?
Personally, I live in one of the most expensive places in the US for school (not by choice) and I think it's grossly unfair that they allocate the same stipend for me as someone living in a state with much lower living costs. Obviously the taxes are going to hit them much less than they are me.
Failing to pay taxes can get you into legal trouble and cause your clearance to go bye-bye

SMART-ish
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Re: Taxes taxes and Look more taxes!

Post by SMART-ish »

Does anyone have a suggestion for who to file your taxes with? I have used TurboTax in the past but they don't let you file 1099-MISC for free. If you've had a good or bad experience with other programs I'd love to know!

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