Summary: <br> You might believe that because you’re in grad school and receiving a research stipend, you don’t really need to worry about paying an income tax. You don’t have a ‘real job’ and no one asked you to fill out any paperwork so you’re off the hook, right?<br> <br> <br> <br> Wrong. Utterly, expensively, illegally wrong.<br> <br> <br> <br> <br> <br> <br> <br> The Tax Man Cometh<br> <br> <br> <br> The truth is, graduate students and postdocs who receive paychecks, stipends, fellowships, grants, and any other type of pay are expected to pay income taxes. Unfortunately, that’s not always made clear by your department.<br> <br> <br> <br> This week on the show, we talk with Emily Roberts, PhD, about the special tax questions grad students and postdocs should be asking. Emily earned her degree in Biomedical Engineering, but now spends her time helping trainees navigate the world of <a href="http://www.gradstudentfinances.org">personal finance.</a><br> <br> <br> <br> Emily explains that there are two broad categories of trainee income:<br> <br> <br> <br> * Compensatory pay – this is money you receive for doing work, like research assistant, teaching assistant, or any other ‘real job’ you’ll have in your life. You’ll get a W-2 form, and your employer will withhold taxes throughout the year. This is how normal people do taxes.* Non-compensatory pay – this is ‘awarded’ to you. It might be a fellowship, scholarship, or training grant, but it’s not considered pay for performance. And that can lead to a whole heap of side effects when it’s time to pay Uncle Sam.<br> <br> <br> <br> Students and postdocs who receive non-compensatory pay may not have taxes withheld, and their department may not even let them know they’re required to pay taxes! They’re also not eligible for certain tax breaks.<br> <br> <br> <br> What can you do? Check out some of the following resources to learn more, and be sure to ask a tax professional for details on your own situation. That way, you won’t get a nasty surprise in year three of your training when an IRS auditor shows up at your door!<br> <br> <br> <br> * IRS <a href="https://www.irs.gov/pub/irs-pdf/p970.pdf">Publication 970</a> Chapters 1, 3, and 6 (particularly p. 5-6)* <a href="https://youtu.be/JlSBrCQz9nY">Compensatory and non-compensatory pay and their tax implications.</a>* <a href="http://www.gradstudentfinances.org/grad-students-dont-believe-these-tax-lies/">Tax lies told to graduate students</a>* <a href="http://www.gradstudentfinances.org/how-do-i-calculate-and-report-my-taxable-income/">How do I calculate and report my taxable income?</a>* <a href="https://youtu.be/psUZsFRGRIM">Can a grad student contribute to an IRA using his stipend?</a>* <a href="http://www.gradstudentfinances.org/paying-income-tax-throughout-the-year/">Do I have to pay income tax throughout the year and how do I do it?</a><br> <br> <br> <br> Heads I Win, Tails You Lose<br> <br> <br> <br> Also in this episode, Josh takes his love of gaming to a whole new level by exploring the <a href="http://statweb.stanford.edu/~susan/papers/headswithJ.pdf">non-random</a> outcome of a coin flip. It turns out people are actually doing <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2789164/">peer-reviewed research</a> on coin flipping, including magician-turned-mathematician <a href="https://www.youtube.com/watch?v=AYnJv68T3MM">Professor Persi Diaconis</a>!<br> <br> <br> <br> <br> <br> <br> <br> And since we’re bemoaning the 16th Amendment to the US Constitution (income tax), we might as well celebrate the 21st (the repeal of prohibition!) with <a href="http://21st-amendment."></a>
