Hey TurboTax community,
I recently used TurboTax to pay my taxes, and I feel like I grossly overpaid. I want advice on how to get that money back - can anyone help?
I am a graduate student on an NIH F31 fellowship stipend, with a gross income of $30,223 for 2019. Frustratingly, schools don't take out taxes on those for you, and they don't give you a W2, so I have to pay estimated taxes throughout the year. I did so over the course of 2019, paying $1,704 to the IRS in estimated taxes. This amount was based on my 2018 Tax return, where I'd had the same situation and made the same amount of money ($30,859), and so the Total Tax that I paid for 2018 was $1,971.
I recently filed for 2019 using TurboTax, putting my income of $30,223 in the Other Income category. But this year TurboTax calculated that I owed a Total Tax of $4,278. So with the underpayment penalty, I still owed $2,588. I paid it, but I keep thinking about it and that I grossly overpaid my taxes. Why should my taxes have increased from $1,971 to $4,278? What did I or TurboTax do wrong here?
Can someone either help me out with the math of it, or can you suggest how I can get my money back?
Thought of something else. How much is the tax? The underpayment penalty? Maybe you didn't pay a penalty on your 2018 return?
Did you enter the estimated payments? Which lines look wrong? Try to compare 2019 to 2018. Watch out the line numbers and schedules have changed.
Print your return and actually read it. While the rules that control what goes on each line are sometimes complex (not any more so than rules for an IRB or IACUC protocol, though) the form itself is a straightforward math problem. You should really print and read it before you file.
If your only income is a $30,000 fellowship, then your tax would be about $1800. ($30223 gross income minus $12,400 standard deduction = $17,823 taxable income, the first $9700 taxed at 10% and the rest taxed at 12%.)
But $4278 is not the correct tax if you had incorrectly reported the income as self-employment, it would be higher than that. $4278 is also way too much to be the regular tax on your income plus a penalty, the underpayment penalty plus interest should be no more than 12% of the amount of tax you owed.
So something else is wrong with your return. You have more income listed somehow. Did you get a 1098 for your tuition waiver and that was somehow added incorrectly to your taxable income?
Generally speaking, you should have a form 1040 with lines 1-6 blank (income). You should have a schedule 1 with your fellowship on line 8 with "SCH" or "fellowship" listed on the line next to the amount, and no other entries on schedule 1. The fellowship on schedule 1 line 8 should be copied over to form 1040 line 7, and that's it. You should have no other forms as part of your return. Anything else means you either had a more complicated tax situation than you described, or you got some wrong numbers into your tax return somewhere.