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ngeorgia · Nov 19, 2008, 04:03 PM

Hello
I am a postdoc in Alabama. For a postdoc, if he/she gets somekind of fellowship then school does not take out taxes from the paycheck. In my case, I was on regular paycheck (with all tax deductions including Federal, State, City and County taxes) until June 2008. From July 2008, I was paid through the fellowship which is tax exempt for state/city/county taxes. Also I was told that I need to make quarterly estimated payments to IRS. My question is what portion of income will be used towards estimated tax payments i.e. July to November or the whole year. Since I already paid taxes for half of the year through payroll deduction. I am really confused and worried of any penalty.
Thanks
NSA

MukatA · Nov 20, 2008, 04:06 AM

Scholarship and fellowship grants not reported on Form W-2 are included in your wages income. Also, enter “SCH” and the amount on the dotted line next to line 7 of Form 1040 (or line 1 of 1040EZ or line 7 of 1040A). However, if you were a degree candidate, include on line 7 only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 7.

Any "SCH" amount that you put on line 7 of Form 1040 is subject to employment taxes at 15.3%. Include amounts you receive under a scholarship as pay for your services as an independent contractor in determining your net earnings from self-employment. If your net earnings are $400 or more, you will have to pay self-employment tax.

AtlantaTaxExpert · Nov 21, 2008, 12:27 PM

You can make estimated payments using Form 1040-ES, which can be downloaded from Internal Revenue Service.