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2004 Tax Information

Graduate Students - U.S. Citizens and Residents

The Office of General Counsel is providing this information to help you in filing your income tax return due April 15, 2005. All the information and forms you need to complete your tax return are linked from this Web site.

You will need to:

Collect Necessary Tax Forms

Read Instructions/Sample Forms

Attend The Workshop

Read General Tax Rules

1.       Collect Necessary Tax Forms

You need your tax forms from Princeton and any other source of income.  You can obtain New Jersey tax forms and information online by going to http://www.state.nj.us/treasury/taxation, and you may obtain Federal forms and information by visiting http://www.irs.gov. You may pick up Federal and New Jersey tax forms at Firestone Library or the Princeton Public Library. Forms will not be available in the Graduate School Office or in the Office of General Counsel.

• IRS Form 1040A 1040A Instructions
• IRS Form 8843
• NJ Form 1040 NJ 1040 Instructions
• NJ Form 1040NR NJ 1040NR Instructions
• NJ Form 1040EZ NJ 1040EZ Instructions
• NJ Form TR1040

A Property Tax Rebate is available to some homeowners and tenants in New Jersey.

 2.     Read Instructions and Sample Forms

Please Note: These sample forms are from 2003 and although the dollar amounts may change, the instructions remain the same.

If you only received service income from Princeton University during the calendar year as an Assistant Instructor (AI) or as an Assistant Researcher (AR) and did not receive any fellowship support, click here:

Service Income (AI/AR) All

If you received some AI or AR service income and some fellowship support, click here:

Service Income (AI/AR) Partial

If you did not receive any AI or AR service income from Princeton University during the calendar year, click here:

          No Service Income (No AI/AR)

3.     Attend The Workshop         

There will be an instructional workshop for Graduate Students - U.S. Citizens or U.S. Residents on Monday, March 21, 2005 from 4:45 PM to 6:30 PM in Frist Campus Center Room 302. Please bring the relevant sample form, Form 1040 (virtually all resident graduate students should be able to use Form 1040A), instructions, your last pay stub of the applicable calendar year, and your W-2 (if you received one this year). Individual questions will be answered at that time.

 

4.       Read General Tax Information for Graduate  Students -           U.S. Citizens and Residents

•  Scholarships or Grants

•  Income for Services (AIs, ARs, Assistant Masters)

•  Income Reportable on Your Tax Return

•  Do I have to file a Federal return?

•  Do I have to file a New Jersey return?

Scholarships or Grants.  The Internal Revenue Code contains rules that govern the tax status of payments that you receive as a graduate student. First, the Code specifies that if you are a degree candidate and if you do not work for the University, then the amount of any scholarship award which you use to pay for tuition and for books, supplies and fees required for your courses of instruction is not subject to tax. Any grant amount which remains after you deduct these specified expenses is subject to tax and must be reported to the Internal Revenue Service. You should keep in mind that this rule applies to grants that you receive from sources outside the University as well as to any grants that you receive from and through Princeton.

If the only income you received from the University was a fellowship grant, you should not have been sent a Form W-2. However, the fact that you did not receive an IRS Form W-2 does not relieve you of the obligation to report and pay tax on fellowship income exceeding tuition.

As indicated, the amount of any fellowship or grant you receive and use to pay for tuition and for books, supplies and fees required for your courses of instruction is not subject to tax. You do not have to report these amounts on your tax return as long as you have receipts to verify the amounts you spent on books and fees. However, any fellowship amount that you use to pay for items other than for tuition and for books and fees, such as for room and board and for travel, is subject to tax and must be reported on your federal tax return, Form 1040A Line 7 ("wages, salaries, tips, etc."). If you paid estimated taxes on this taxable fellowship income, then enter this amount on Form 1040A Line 40.

Income for Services (AIs, ARs, Assistant Masters).  A different rule applies to the payments you receive for the work you do for or at the University. Any award or income that you receive as compensation for services rendered is taxable income to you. This is so regardless of how this income is spent and regardless of the connection that the services have with your studies. Therefore, if you are a teaching or research assistant, any income received in return for these services is taxable income. Assistant Master stipends are also taxable. This rule applies even though the research that you do as a research assistant serves as the basis for your dissertation.

Reimbursement for expenses incurred that are directly related to your work as a teaching or research assistant, however, may be a non-taxable reimbursement of a trade or business expense. For example, if your department requires you to travel as part of your AR or AI job and if you incur expenses directly related to your current work while traveling, then any reimbursement received may be considered non-taxable income. Also, your status as a teaching or research assistant does not preclude you from receiving a separate, non-taxable tuition grant. In fact, it is not uncommon for graduate students to receive both a tuition grant and compensation for services rendered.

Loans are not subject to income tax.

Income Reportable on Your Tax Return.  By this time, you should have received an IRS Form W-2 from the University's Payroll Office if you worked as an AI or AR or you performed services for the University during calendar year 2004. This form notifies both you and the IRS of taxable compensation income. The amount of income listed in Box 1 of your Form W-2 should be entered on Form 1040A Line 7 of your tax return.


Do I have to file a Federal return?  If you received less than $7,950 in gross income during the year, you may not have to file a tax return. (Different rules apply if your parent claims you as a dependent.) However, if you received an Internal Revenue Service Form W-2 from the University, you may want to file a tax return in order to obtain a refund of taxes withheld. As a United States citizen or resident you should file IRS Form 1040A.

Do I have to file a New Jersey return?  The State of New Jersey does not impose a tax on any amount of fellowship income regardless of how it is spent.  Therefore, if the only income you received was in the form of a fellowship from the University, you do not have to file a New Jersey Tax Return.  However, if you received service income of more than $10,000 (as an AI, AR or for other services performed), you must file a New Jersey State Tax Return.