First Year Taxes
Posted: Wed Feb 21, 2024 7:27 pm
Hello, this is my first year as a SMART Scholar and I am getting mixed messages about how to deal with taxes. I am hoping that somebody can help clear things up.
As a first year grad student scholar, I received the following amounts:
$19,166.65 – Regular stipend. (August 2023 - December 2023) I believe that this should be taxed as normal income.
$2,500 – Healthcare allowance. I am not sure if this should be taxed at all or if we should somehow deduct our healthcare expenses for the year. I also do not know if we can deduct only up to $2,500 or more if we spent more on health insurance.
$1,000 – Miscellaneous allowance. I am not sure if this should be taxed or if we should somehow deduct expenses for books or a laptop. I also do not know if we can deduct only up to $1,000 or more if we spent more on miscellaneous educational expenses.
$2,000 – Reimbursement for travel to the sponsoring facility. The travel actually cost me more than $2,000 so I think this amount should not be taxed at all.
In total, $24,666.65 was reported in box 3 of the 1099-MISC.
I spoke with an IRS Representative and they said that I should be considered self-employed based on how the income was reported with form 1099-MISC. The benefit of this is that I can easily deduct my healthcare, travel, and miscellaneous expenses. The downside is that I would need to pay a lot more in taxes.
Previous posts on this forum says that we should absolutely not be considered self-employed. The benefit of this is that we do not pay self-employment taxes. However, I do not understand how I would go about deducting the travel reimbursement or the healthcare allowance from my income.
Hopefully a past SMART scholar has gone through this before and can help out! I think this info would be super useful for all of the new scholars as we enter tax season.
As a first year grad student scholar, I received the following amounts:
$19,166.65 – Regular stipend. (August 2023 - December 2023) I believe that this should be taxed as normal income.
$2,500 – Healthcare allowance. I am not sure if this should be taxed at all or if we should somehow deduct our healthcare expenses for the year. I also do not know if we can deduct only up to $2,500 or more if we spent more on health insurance.
$1,000 – Miscellaneous allowance. I am not sure if this should be taxed or if we should somehow deduct expenses for books or a laptop. I also do not know if we can deduct only up to $1,000 or more if we spent more on miscellaneous educational expenses.
$2,000 – Reimbursement for travel to the sponsoring facility. The travel actually cost me more than $2,000 so I think this amount should not be taxed at all.
In total, $24,666.65 was reported in box 3 of the 1099-MISC.
I spoke with an IRS Representative and they said that I should be considered self-employed based on how the income was reported with form 1099-MISC. The benefit of this is that I can easily deduct my healthcare, travel, and miscellaneous expenses. The downside is that I would need to pay a lot more in taxes.
Previous posts on this forum says that we should absolutely not be considered self-employed. The benefit of this is that we do not pay self-employment taxes. However, I do not understand how I would go about deducting the travel reimbursement or the healthcare allowance from my income.
Hopefully a past SMART scholar has gone through this before and can help out! I think this info would be super useful for all of the new scholars as we enter tax season.