Emily Roberts

It doesn't hurt to ask. I think your argument regarding the number of hours required is a strong one, as well as your advanced qualifications. But keep in mind that their hands may be absolutely tied.

I think the relative perceived prestige of the two awards is going to be pretty field-dependent... Personally, I was in biomedical engineering and was more impressed that my cohort had an NDSEG recipient than any single one of the several GRFP recipients. If you're only looking at what your peers think that's not really the important part of the picture, though... What do your potential future funders/employers think? Also you can put the fact that you received both awards on your CV even though you'll only accept one. So to me that's a reason to go for the better package (whichever you decide that is) while weighing less heavily how they are regarded as you'll still get some of the prestige benefit from the one you turn down.

The Kiddie Tax won't apply to you in 2020 but could potentially apply in 2019 as the definition of a student is to be enrolled in "some part of each of any 5 calendar months of the year" (Publication 501 p. 12). You'll have to look at the rest of the criteria to see if you are subject to it or not, which you can find the instructions for Form 8615. If you aren't in school right now though and are earning (e.g., W-2 income) a salary, there's a good chance that you will pass the "support test," but that will come down to your earned income in this part of the year vs. your living expenses for the year and educational expenses once you start grad school. (Also, the Kiddie Tax is only a concern for fellowship/training grant recipients, not RAs/TAs receiving W-2 pay... Just wanted to make sure that is clear since you didn't say where your funding will come from in the fall.)

Yes, when calculating the standard deduction, taxable scholarships/fellowship are earned income, but for the Kiddie Tax (and all the other purposes I can think of) they are unearned income. Super confusing that they use the same terms, but clearly defined when reading about one topic or the other. Yes, your Kiddie Tax will be calculated off of your taxable income, which is after you've subtracted the standard deduction. Page 4 of Form 8615's instructions (https://www.irs.gov/pub/irs-pdf/i8615.pdf) has the exact calculation. While it is super infuriating that the Kiddie Tax applies at all in this situation, I don't think their use of the word "child" invalidates it. Page 1 of Form 8615's instructions state: "These rules also apply whether or not you’re a dependent." The Kiddie Tax first only applied to children up to age 14, but in increments that age has been increased to age 24. The name "Kiddie Tax" has even stuck, though self-sufficient graduate students do not deserve that moniker. But it's there due to the history of the tax policy. You're certainly welcome to hire a CPA to see if you can get out of this for 2018 and how to avoid it in the future. I'm currently corresponding with another grad student who found he's subject to the Kiddie Tax. He is working with a CPA but they haven't come up with any workarounds. As for future years, I think your best hope is to work with your program to receive W-2 (assistantship) pay for at least part of the year in 2019 and 2020. Perhaps they will be able to defer your fellowship to start in 2021 or the latter part of 2020.

1) I want to affirm that this is a terrible policy and it very, very much sucks that it applies to you. 2) I have an article up now on this situation. I think you already know the content, though. I haven't found a way out of this retroactively. 3) If you can't afford to pay your tax bill, tell the IRS and set up a payment plan. 4) If you are not turning 24 until 2020, try to take at least one step to avoid the tax in 2019 (at the end of my article).

I recently gave an interview for Hello PhD on this topic.

I create resources on taxes for grad students and postdocs, and the Kiddie Tax question has bugged me for several years. In 2018, I hired a tax firm to do some research for me, and this was one of the questions I asked them. Answer: Yes, the Kiddie Tax does apply for fellowship income in certain situations (regardless of your dependent status). I am going to write a detailed article on this, but it won't be published until next month probably. Is there anything further I can help you with, aside from confirming that this is a (terrible, unfair) thing? I think the only way to avoid it is proper planning in advance, which of course is no help to you, but I'm hoping that my article may help some future students avoid it.

[In the US] An offer letter stipend essentially reflects your "gross" salary, from which you will pay income tax. Generally speaking, if you have an assistantship, income tax will be withheld by your university, and if you have a fellowship, you will manually pay quarterly estimated tax. Try comparing your stipend offer to the local living wage to see if it's sufficient.

I applaud you for sketching a budget prior to committing to housing! It's simple to calculate your tax liability using the info you provided, at least for your first full year of employment (2019). 2018 may be different as you'll be starting/changing jobs mid-year. For federal income tax, if you are single and take the standard deduction of $12,000, you will pay 0% tax on that first $12,000 of income, 10% tax on the next $9,525, and 12% on the remainder (these are the 2018 brackets). Using the numbers you provided, that is 10%*$9525+12%*($14,000-$9,525)=$1,489.50 or $124.13/mo. This tax liability may shift if you have other adjustments to your income, such as additional income sources or above-the-line deductions, e.g., interest paid on student loans. You should check if you're receiving any scholarship funding or similar that isn't tax-free (i.e., money that goes toward fees that are not qualified education expenses) or if any of your stipend will go toward paying qualified education expenses. For estimation purposes, you could just add any net scholarship income to your stipend or subtract any net qualified education expenses from your stipend, even if that's not exactly how you'll treat it on your tax return. Check your offer letter for these kinds of details on your non-stipend funding. You won't pay FICA tax no matter your funding source. Tennessee doesn't have state income tax on ordinary income, just investments. If you have an assistantship, you'll fill out a W-4 and have income tax automatically withheld from your paycheck. If you have a fellowship (internal or external), it's most typical for universities to not withhold any income tax (though a few do). In that case, you would need to look into filing quarterly estimated tax - probably not necessary for 2018, but likely required in 2019 and following.

Co-signing @TakeruK's example above. Break the "I owe $3,500 in taxes" down into its components to see if each one is reasonable (your Form 1040 separates federal income from self-employment tax into different lines before totaling them). How much is for federal income tax, federal self-employment tax, and state income tax? How does it compare to the calculation above? Was any tax withheld from your stipend income and was that accounted for on the return? You wouldn't have had any tax automatically withheld from your self-employment income, which is why you're facing such a large bill now since you owe both income tax and self-employment tax (15.3%) on that component. You also have to be very careful not to get caught up in how much extra you owe at tax time/the size of your refund or compare that number to anyone else's (or even yours in the past). It depends both on your total tax liability AND how much was withheld/paid in estimated tax throughout the year. Compare the total tax you owe this year with the total tax you paid last year, and unless something went really awry with one or both returns you should have paid more last year due to your higher overall income and higher self-employment income. Did something change with your stipend - go from assistantship to fellowship funding, for example? If you used to have automatic tax withholding on your stipend and don't any longer, that could help explain why you are supposed to pay more when filing this year's tax return than last year's. Since it seems like you're long-term self-employed for a big chunk of your income, you should be paying quarterly estimated tax on that part of your income. Part of what you owe this year may be penalties for not doing so, and that wouldn't necessarily have applied for last year if it was your first year in business. You may find this article (mine) helpful going forward: http://pfforphds.com/how-to-pay-tax-on-your-phd-side-hustle/

The system at your current university strikes me as unusually structured. I know for my grad school the only differentiation among assistantship/training grant stipends were due to which school you belonged to (graduate, engineering, or medical), and everyone was paid the same base rate for a given academic year no matter if they were a 1st or 5th year. (Some people might be paid more if they won a fellowship.) Those might represent two ends of the spectrum of how much universities differentiate among students to determine their stipends. You might find the data in PhD Stipends helpful to narrow down a bit what you might be offered at various universities (disclaimer: my site).

As @GreenEyedTrombonistsaid, assistantships come with a work requirement (usually up to 20 hrs/week), while fellowships do not. Fellowships allow you to be 100% devoted to your studies and your dissertation work, while in the worst case scenario for an assistantship up to 20 hrs/week could need to be devoted to something else (teaching, administrative work). In my observation, a research assistantship for which you are allowed to work on research that will go into your dissertation (typical in STEM fields, but not universal) is on a day-to-day basis equivalent to a fellowship. All your time is devoted to research (and maybe taking classes) in both cases. You wouldn't be able to tell the difference between an RA and a fellowship student unless you look at their tax returns!

I think for most STEM programs it's just that the stipend source will change after 9 months and the offer letter doesn't apply after that point. Yes, it's probably that you will join a lab and have an RA through that lab, so funding is contingent on that happening. However, that's not always the case, and some programs really do just pay stipends during the academic year (e.g., you are a TA and don't have a class over the summer). The typical funding path for PhD students should be discussed during your visit weekend, and if it's not you definitely need to inquire. As a bit of an exception to the above, I think it is common in CS programs for students to do summer internships (which tend to pay more than RAs would).

This is field- and program-dependent. Only mentioning funding for the first year is not necessarily a bad sign because it is common for funding to continue and it may not be 100% known right now where that funding will come from in the 2nd year and beyond (e.g., it might depend on you being accepted into an advisor's group). But it's something you definitely need to inquire about if you are seriously considering the offer. If you have a visit weekend scheduled they will probably talk about funding for the rest of the PhD at that time (at least what is typical) or you can ask the question. If you aren't getting a visit weekend, ask the admin assistant/person coordinating the admissions process.

Since the number of available TA positions depends on how many current students clear out, I wouldn't expect to hear about that until well after you have to make a decision about where to go. And he didn't even address the RA question, which isn't a great sign. If I were you, I would assume that I wasn't going to receive funding from this university. See what other offers come in and then maybe circle back to it if you think that risk is worth taking. Is it typical in your field for people to go into PhD programs without funding? I wouldn't have guessed so but I'm not very familiar. What is the typical trajectory in terms of securing an advisor with this program? Does that happen prior to matriculation or at a certain point in the first or second year?