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Definitely file your taxes. I think the key issue is whether your research work was independent or if you were working under someone's direction. If you were working under faculty supervision and not independently, you have a much stronger case for this not being self-employment. Did the program give you any paperwork that describes the stipend/grant nature of the payment? That would be helpful documentation to have.
The program definitely had us working under faculty mentors! We didn't direct our own research - we were assigned to projects and supervised the whole time. I do have the acceptance letter that specifically calls it a "research stipend" and mentions it covers living expenses during the program. Would that help?
That acceptance letter is exactly the kind of documentation you need! It clearly shows this was a stipend, not self-employment income. Keep that letter and make a copy to include with your tax return. The fact that you worked under faculty supervision further strengthens your case that this wasn't self-employment. When you file, include a simple statement explaining that the amount was incorrectly reported on a 1099-NEC when it should have been classified as a student research stipend, not subject to self-employment tax. Reference that acceptance letter in your statement.
Slight disagreement with some advice here - if the institution issued a 1099-NEC, they've already told the IRS they paid you for services. It might be an uphill battle to argue against it unless you get them to issue a corrected form. Maybe try contacting the program administrators and ask if they'd be willing to issue a corrected form? Worth a shot before trying to contradict the form they issued.
This is actually good advice. I had a similar issue with a teaching stipend and when I contacted the university accounting office, they agreed it was miscoded and issued a corrected form. Saved me tons of hassle.
Just wanted to share that I had this same issue last year but handled it differently. I just waited and filed my taxes normally, making sure to include all the estimated payments I had actually made on my return. When I filed, I ended up having to pay an underpayment penalty, but it was only like $42 on a missed payment of around $2,500. The software I used (TurboTax) automatically calculated the penalty on Form 2210. It wasn't worth all the stress I put myself through worrying about it. Just make the payment as "balance due" now if you want to minimize the penalty, or just wait until you file. Either way, it's not going to break the bank.
Did you have to fill out the full Form 2210 with all the calculations, or did TurboTax handle that for you? That form looks super complicated and I'm wondering if I need to pay extra for that feature.
TurboTax handled all the calculations automatically for me. I didn't have to manually fill out anything on Form 2210. The software asked about my estimated payments throughout the year, and when it detected that I had missed one, it just did the math in the background. You shouldn't need to pay extra for this feature - it's part of their standard tax return preparation. The form is definitely complicated if you try to do it manually, but that's the beauty of tax software. Just make sure you accurately enter the dates and amounts of the estimated payments you did make.
Quick question related to this - if I make a payment as "balance due" now for the estimated payment I missed, do I still have to fill out Form 2210 when I file my taxes? Or will the IRS just figure out the penalty on their own?
You'll still need to complete Form 2210 when you file. Making a payment now as "balance due" helps reduce further interest from accruing, but it doesn't eliminate the need to calculate the penalty for the period the payment was late. Most tax software will handle this calculation automatically if you enter all your payment information correctly. If you're filing by paper, you'll need to complete the form yourself. The IRS can also calculate the penalty for you if you don't include the form, but they may not apply all exceptions or calculate it as favorably as you might.
I'm in the same boat as you and just made my payment using "balance due" yesterday. My tax guy told me that we'll handle the Form 2210 when filing, and that the penalty won't be huge since my first three estimated payments were made on time. I'll report back after filing to let you know how it went!
Has anyone had success calling the Healthcare Marketplace directly instead of the IRS? My return got rejected for a similar reason, and it turned out the Marketplace had updated my 1095-A but hadn't sent me the revised version. They emailed me an updated form within 24hrs of calling them.
Pro tip: In TurboTax, go to Tax Documents section, delete ALL versions of your 1095 forms, then re-upload them, but make sure to manually enter all the information when prompted rather than letting TurboTax try to "read" the forms. Sometimes their OCR misreads critical info. And double-check the "coverage months" boxes - I've seen cases where TurboTax marks someone as having coverage for incorrect months, which creates a mismatch with what the Marketplace reported to the IRS. Good luck! These 1095 rejections are frustrating but usually fixable with some patience.
Don't forget to check if you're eligible for the Earned Income Tax Credit! Even as a dependent, if you had earned income, you might qualify. For 2024 taxes (filing in 2025), if you earned less than $17,640 and are at least 25 years old OR have a qualifying child, you could get a pretty decent refund even if you had no tax liability.
Thanks for mentioning this! I'm only 20 though, so I guess I wouldn't qualify until I turn 25? That's kind of a bummer.
You're right about the age limitation, unfortunately. The EITC typically requires you to be at least 25 unless you have a qualifying child. However, you should still look into filing returns for any years where you had federal income tax withheld from your paychecks, as you'd likely get that money refunded regardless of the EITC. And keep the EITC in mind once you hit 25 - it can be quite valuable!
just fyi, you can also get your wage and income transcripts directly from the IRS website by creating an account at irs.gov/transcripts. it's free and shows all reported income documents (W-2s, 1099s, etc) for previous years. might be easier than tracking down old employers
Just tried this and got stuck in ID verification hell. Apparently you need a credit card, mortgage, or auto loan to verify online? Guess I'm stuck calling them after all :/
Mei Zhang
Something important that nobody's mentioned yet - if your scholarships/grants ARE partially taxable, the school often doesn't withhold any taxes on that amount! This can leave you with a surprise tax bill at filing time if you're not prepared. I learned this the hard way last year when I owed nearly $900 because of my taxable scholarship portion. You might want to consider making estimated tax payments throughout the year to avoid a big bill (and potential penalties) at tax time. Form 1040-ES is what you'd use for that.
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GalaxyGuardian
ā¢Thank you for bringing this up - I hadn't even thought about withholding! Does the school typically report scholarship/grant info to the IRS? Or would they only know if I report it? And how would I even calculate how much I should pay in estimated taxes?
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Mei Zhang
ā¢Yes, schools report your scholarship and grant information to the IRS using Form 1098-T, which shows your tuition and related expenses as well as scholarships/grants received. So the IRS does know how much you received, even if you don't report it. This is why people sometimes get letters from the IRS later asking about unreported income. For calculating estimated taxes, you'd need to figure out approximately how much of your scholarship/grant money will be used for non-qualified expenses (the taxable portion), then calculate the tax on that amount based on your tax bracket. The IRS has worksheets in the Form 1040-ES instructions to help with this. Since you're a dependent, your tax situation might be affected by the kiddie tax rules depending on your total income.
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Liam McConnell
I've seen a lot of students just ignore the taxable portion of scholarships and grants, thinking the IRS won't notice because they're students. This is a HUGE mistake! The IRS computer systems automatically flag mismatches between what your school reports on Form 1098-T and what you report on your tax return. It's way better to properly report everything now than deal with an IRS notice, potential penalties, and interest later on. Especially since this could be happening for multiple years in your case, which could add up significantly.
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Amara Oluwaseyi
ā¢Is there a specific form we need to use for reporting scholarship income? I don't see anything specific about this on the 1040.
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