Skip to content Skip to navigation

Taxes 101 for Students

We understand taxes can be overwhelming and intimidating, especially the first time students deal with them!

First, take advantage of the thorough tutorial available on Haven Money.

Quick tips from that tutorial:

  • For income earned in 2019, taxes are due April 15, 2020.

  • If you earn income through work or scholarships, you will probably need to fill out a variant of Federal Form 1040 as well as California state tax Form 540 every year.

  • Many students will receive refunds from taxes that have been withheld throughout the year.

  • Look into the American Opportunity Credit, Lifetime Learning Credit, and Student Loan Interest Deductions. (The 1098T form from Stanford provides the IRS with the information required from students who apply for these credits.)

  • Students should use their Account Activity data in Axess (not the 1098T) to determine their aid income and qualified expenses (Tuition, Health Insurance, CHSF, doc fee, ASSU fee) for each tax year.

  • Keep your W2 or 1099 from your employer.

  • Fellowships and grants may be taxed, and it is generally up to the student to estimate taxes and do quarterly withholding.


After completing the tutorial on Haven Money, check out:

US citizen and permanent resident students

Rules regarding tax reporting and how to determine your taxable income.

https://sfs.stanford.edu/taxes/us-citizen-and-resident-alien-students

1098T tax form FAQs and guide

https://sfs.stanford.edu/taxes/resources


International students

Information regarding tax exemptions, tax forms, rules regarding taxation of university support

https://sfs.stanford.edu/taxes/non-resident-alien-students

Tax filing requirements, resources for tax filing help including webinars and software for filing federal taxes.

https://bechtel.stanford.edu/practical-matters/taxes


 

Tax Forms Sent to Students from Stanford

  • The University is required by the Internal Revenue Service (IRS) to file an annual Tuition Statement (IRS Form 1098-T) for each student who is a U.S. citizen or permanent resident pursuing a degree, and for whom a reportable transaction is made, e.g., tuition, student activity fees and any scholarships or grants received. A copy of the 1098-T is mailed to the student in January each year. 

  • For wages (paid twice a month), a W-2 will be sent annually, at the end of January, by the Payroll Department. See Quick Steps: Order Duplicate W-2 Statement if you do not receive this form.

Many non-U.S. residents will receive a form 1042-S, each year in late March, reporting fellowship amounts received, taxes withheld and payments not taxed due to a treaty exemption. Submit a Service Now request to Payroll if you are a non-U.S. resident and do not receive Form 1042-S, or if you require duplicate forms.


Ready to learn more?

Below are some credible resources for more in-depth information.

 

Federal Tax Benefits for Higher Education

http://www.nasfaa.org/2018_tax_year

Details tax credits and deductions available to students and the related eligibility requirements. Also explains tax on student financial aid. Remember, aid may be taxable but is often tax-free (see the last paragraph on this site).

 

Personal Finance for PhDs

http://pfforphds.com/tax

Offers tips for graduate students with university funding from the perspective of a former PhD student

 

Internal Revenue Service

https://www.irs.gov/publications/p970#en_US_2016_publink1000293200

Pub 970 covers tax benefits for education

https://www.irs.gov/individuals/international-taxpayers/foreign-students-and-scholars

Details IRS information for foreign students and scholars.

 


 

Lifelong tax tips from the Director of University Tax Compliance

  1. Be honest. Keep good records. Document your deposits as well as your expenses. If audited, be organized to move the audit along quickly. Rehearse your audit. Only answer the questions that you are asked. Be nice to the auditor. You do have appeal rights.

  2. Make sure you timely pay enough in withholding or estimated tax throughout the year. Make sure you pay all taxes by the IRS due date, even if you extend your time to file.

  3. Pay your medical insurance and out of pocket costs and child care expenses with pretax dollars if such employer plans are available.

  4. Invest in a Roth IRA if you can! You’ll thank me in 30-40 years when you are not paying tax on your retirement income.

  5. Keep your Adjusted Gross Income (AGI) as low as possible. Higher AGI has side effects on your tax return and elsewhere (financial aid, Affordable Care Act taxes, etc)

  6. Know your marginal tax rate.

    • Taxable income reduction times marginal rate equals tax savings.

    • Nondeductible rent divided by the result of one minus your marginal tax rate equals the equivalent tax-deductible mortgage interest and property tax on your own future home.

  7. Tax planning and actions occur during the tax year. You can smooth out income spikes through timing of income and deductions.

  8. Know when to say HELP! Tax law is complicated and there are severe penalties for noncompliance. An error can set your financial plan years back. Consider seeking the advice of a tax professional when:

    • You are behind in the payment of your taxes

    • Your return goes beyond your wages and bank interest

    • You buy a home or invest in rental property

    • You accumulate stock options, RSUs and ESPP shares or partnership interests

    • You are contemplating marriage or marital separation or become widowed

    • You are being audited or discover errors on prior returns

    • You are moving from one state to another or work in more than one state

    • You start a small business

    • You need to care for elderly parents or other relatives

    • You are planning future intergenerational transfers (inheritance, college planning)

 


The items presented here are for general information only and do not constitute tax advice. The University does not endorse nor independently confirm the information presented in any other website referred to in this document. The University encourages users of this page to seek qualified tax counsel when appropriate.