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This Postdoc Epitomizes Side Hustling to Get Out from Under $100,000 of Debt

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In this episode, Emily interviews Dr. Shana Green, a postdoc at the Centers for Disease Control and Prevention in Atlanta. Shana finished her PhD with $108,000 of debt, and she decided to side hustle to pay it off as fast as she could. After trying several academic and non-academic side hustles, she is currently chiefly working as a driver for GrubHub. She’s on track to be completely debt free in less than four years total. We discuss the strategies she’s used to optimize her side hustle, how she feels about side hustling as a driver, and her goals for her YouTube channel, The Wealth Vibe.

Links mentioned in episode

side hustling postdoc

0:00 Introduction

1:09 Please Introduce Yourself

Dr. Shana Green is a Gates Millennium Scholar. This program funded all of her undergraduate education, and provided some funds for graduate education. Shana went to Howard University for her bachelors of arts in Anthropology. She got a Masters of Public Health at Columbia University, where she had to take out student loans for rent, food and living expenses. She went to the University of South Florida for her PhD in Public Health, where most of her education was funded but she had to take out some loans for her fifth year. She graduated in 2017 and worked as a postdoc at the Centers for Disease Control and Prevention (CDC). She recently got a new position as a contractor for the CDC.

4:54 What was the total of your debt when you finished your PhD?

Shana was aware of her debt before she finished her PhD. She had $108,000 in debt when she graduated with her PhD. She says about $56,000 is from student loans. She took out about $40,000 from student loans, but she has accrued over $10,000 in interest. She had car debt, IRS debt, medical bills, and credit cards. One of her credit cards had $14,000 of debt.

She didn’t have to go into repayment for her student loans during her postdoc because she qualified for graduate fellowship deferment. She wanted to tackle her other debt first. Now she has about $63,000 in debt remaining. She paid off the credit card, IRS debt, and medical bills. She is very close to paying off her car. She will only have her student loans remaining after two years of he repayment journey.

Shana says that when she moved to Atlanta, she started side hustling right away. She couldn’t afford to go out and meet people and get to know the city. She went straight to the grind and working hard to pay off her debt.

8:50 How does your postdoc salary affect your debt repayment journey?

Shana is grateful she has a higher stipend than many postdocs. She was making about $70,000 gross annual pay from her postdoc stipend at the CDC. This is in contrast to the National Institutes of Health minimum stipend that was just below $50,000 annual stipend. She was in an Oak Ridge Institute for Science and Education (ORISE) funded postdoc, which compensates based on education and work experience. She received about $5200, then she had to pay quarterly taxes. Her take home was somewhere around $4,000.

Shana says while this was a good stipend, it wasn’t enough to cover her debt payments. She calculated she needed to make another $1,500 to $2,000 more each month for her debt payments. Her goal was to be debt free by February 2021.

11:38 What are the different side hustles that you’ve tried since moving to Atlanta?

Shana says the first side hustle she tried was Instacart. In this job, she shopped for groceries and delivered them. She started that in October 2017. When Instacart changed their system so she made less money, she tried other jobs. She tried virtual assistance, Upwork, and local food delivery service. Since April 2018, she has worked for GrubHub and still does Instacart every now and then. She also does freelance research through Upwork. She says GrubHub is her “bread and butter” as a side hustle.

13:17 How does a GrubHub side hustle work?

Shana explains that when a customer places an order, she gets a ping on her phone. GrubHub provides the details up front to help her decide if she wants to accept it. She is free to reject orders. If she accepts, she goes to the restaurant to pick up the food and bring it to the customer. She contrasts this to Instacart, where she had to put together the order herself instead of just picking it up.

She makes about $20 per hour with GrubHub. The least amount she makes is $15 per hour, and the most is $25 per hour. She spends about four hours a night doing GrubHub. On the weekends nights she works 5 hours. She works at minimum three days during the week. There were several weeks that she worked every day of the week. After her work at the CDC for the day, she almost immediately started her GrubHub work.

17:34 How do you decide which GrubHub orders to take?

Shana keeps three things in mind: the payout, the distance, and whether the person tips. GrubHub pays a minimum of $3 base pay, a mileage contribution, and tips if the customer chooses. She says if the person has not tipped through the app, they won’t tip in person. She tries to take orders $8 or $10 or more. She also tries to do orders within a four mile radius. She maximizes the base pay and the tips, not the mileage. Shana mentions some restaurants are unreliable, which she learned through trial and error, and she factors that into her decision.

22:12 Has anything really bad or really good happened to you as you worked for Instacart and GrubHub?

Shana says she had unpleasant interactions with Instacart customers. She tells stories about customers that insult her and imply that she is “lesser” for working these side hustles. These customers have no idea that she has a PhD and works as an epidemiologist. Shana shares that she has felt down about having to work side hustles that are not using her expertise, but she gives herself pep talks and reminds herself this is temporary.

25:08 Why didn’t you limit your side hustles to PhD type of work?

Shana explains that she tried through Upwork to offer data analysis and research consultation services, but she didn’t get any clients. She realized that this wasn’t going to work, because she needs quick money. She wanted to be able to make money like an Uber or Lyft driver could.

She was a little ashamed of doing this at first, and she didn’t tell anyone except for her mother and her boyfriend. She felt like she had reached a level of success, like she was “Dr. Green” and she used to teach at a university. She worried that people would view her work at Instacart and GrubHub as a step back. Now she wants to inspire people to take on their debt and work hard for their financial goals. This is why she started her YouTube channel “The Wealth Vibe.”

Emily says that if anyone speaks negatively about this work, as if this work is “beneath them,” that speaks poorly of that person. She also says that Shana is on a great career trajectory, but the work for many PhDs is more limited and many have to be in adjunct position, which typically does not pay well. Emily says Shana is living like no one else like now because she is working hard, but in two years Shana will be debt free and living like no one else in the positive sense.

Shana shares that she also teaches an online course in Epidemiology. This pays $3,000 per semester. She says she makes way more money through GrubHub than she does as an adjunct. Shana says she found that PhD work does not pay well. Emily adds that there’s not enough volume, or demand, for side jobs for PhDs.

35:08 What is your YouTube Channel about?

Shana’s YouTube Channel is called The Wealth Vibe. She creates videos to help people increase their income, help them budget, so that people can build their wealth. She posts monthly videos about making her budget and paying off her debt. She also makes videos about her side hustles and how to maximize money you make. She has made videos about taxes, because her taxes are not withheld and she has to save for tax payments. She says she reaches a broad audience of people who are GrubHub drivers as well as who have PhDs.

39:40 Conclusion

Moving to a High Cost-of-Living City on a Postdoc Salary

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In this episode, Emily interviews Dr. Sushmitha Vijaya Kumar, a postdoc at the Scripps Institution of Oceanography. Sushmitha recently completed her PhD at the University of Tennessee, Knoxville, where she lived comfortably on her graduate student stipend. However, living in San Diego on a postdoc salary is a whole different level of financial challenge. Sushmitha shares her story of finishing up her PhD, finding housing, and moving from a lower cost-of-living city to a higher cost-of-living city, including the resources she used and the pitfalls she nearly fell into.

Links mentioned in episode

postdoc move

0:00 Introduction

1:06 Please Introduce Yourself

Dr. Sushmitha Vijaya Kumar is a postdoc at the Scripps Institution of Oceanography in San Diego. She is originally from India, where she studied for her Bachelor’s and Master’s in biotechnology. She moved to Tennessee for her PhD and worked at the Oak Ridge National Lab.

2:47 How was your life in Knoxville and working at Oak Ridge?

Sushmitha says Knoxville, Tennessee is a beautiful place in the Great Smoky Mountains. Living in Knoxville was affordable. The graduate stipend was more than enough to live comfortably. Oak Ridge National lab has a super computer for bioinformatics and experimental research. The lab is funded by the Department of Energy. They emphasize collaborative research. She also took courses and taught classes at University of Tennessee in Knoxville. She learned how government research worked compared to how university research worked. She learned that she preferred the government setup that emphasized collaboration.

Sushmitha’s fiancé got a postdoc at the Salk Institute in May 2018. As she thought about her next step after her PhD, Sushmitha knew she was restricted to the geographic area of San Diego. This is when she started looking for postdoc opportunities at the Scripps Institution for Oceanography.

5:17 What was the stipend in your last year of graduate school?

Sushmitha’s salary stayed the same for the four years of her PhD. She received $24,000 annually. She got about $1800 per month. In Knoxville, a one bedroom apartment is 800 to 900 square feet and $900 per month for rent and utilities, at the maximum. PhD students have at least $1000 remaining after rent for food and travel needs. She says having a car is cheap because gas is around $1.20 per gallon. It is easy and affordable to travel by car. She says Knoxville is very affordable to live in as a graduate student, as well as to save money and do exciting things.

7:17 How did you start preparing for the move to San Diego?

Sushmitha’s fiancé moved in May 2018 and did the groundwork. She says it was more difficult than she expected to make the move. Not only did she need to finish all of her PhD work, she had to pack up the place she lived for four years. They decided to take only the bare essentials in their car. She said it was difficult to let things go. They took a road trip from Knoxville to San Diego in late December. The drive took five days. She says she wasn’t prepared for leaving her friends and the familiar place.

9:07 What was your PhD defense timeline?

Sushmitha says the university’s deadline for defense was November 1st. She went to India in the summer for two months. She returned and decided she wanted to wrap things up. She had one month to write her dissertation and prepare for defense. She defended at the end of October. The very next day she flew to San Diego for her interview for her postdoc position at Scripps. She flew back to Knoxville, then she had fifteen days to finalize her dissertation with comments from her committee and submit it to the university. She also had to finish experiments in the lab. December 13th was graduation, and her family came from India. She had three days to pack up her house and prepare to drive to San Diego. Sushmitha says she felt like she made a wrong decision to graduate early, but she doesn’t regret it now. She would advise other people to take more time. She would’ve loved another month for this process, though she didn’t need another full semester.

12:24 How did you arrange for your new housing in San Diego?

Sushmitha says her fiancé didn’t take a full apartment to himself because the postdoc salary is not enough money to qualify for an apartment. You have to prove that your monthly income is three times the monthly rent to qualify. In San Diego, one bedroom, one bath apartments range from $1600 to $2200. The apartments for $1600 are located farther from the institutions and require a car for the commute, which her fiancé didn’t have. Her fiancé lived with a host family and paid $1000 per month for a room in the house.

Sushmitha contrasts San Diego housing with Knoxville housing. In Knoxville, it is easy to find an apartment because many properties have management offices. You could go to the leasing office and choose from available apartments. In San Diego, no apartment complexes are close to the institutes. Housing is managed by individual landlords, and you have to rent from the owner directly. Sushmitha and her fiancé had to show documentation to prove their income, but Sushmitha didn’t receive her documentation in a timely manner. They lost money to application fees during this process.

Sushmitha says they dealt with scammers during their housing search. They experienced five different scams, but didn’t fall for the scams. She knows people who did fall for scams and paid $500 security deposits for places that weren’t real. She’s never seen this before.

When she finally received her offer letter and documentation, she and her fiancé got a one bed one bath in a duplex. The rent is $2200, so one of her paychecks goes to rent and utilities. Emily summarizes that in San Diego, they needed two incomes to show that they could afford the rent together.

18:25 Where did you find housing listings?

Sushmitha says they used Craigslist, Zillow, Apartments.com, and the Facebook group Free and For Sale University of California, San Diego. On Facebook, people post about roommate openings, available apartments, and advice. She also asked her HR department for help.

She says the scams came from the Facebook group and Craigslist. She posted in the group that they were looking for one bedroom one bathroom and they received fake offers. On Craigslist, some of the listings are scams. The postings include photos of real apartments and seem real. When you email the lister and ask to visit the apartment, you receive an excuse about why they’re out of town and they’ll ask for money without showing you the place.

22:28 How did you find the place you are living in now?

Her current apartment was listed on Zillow. Her fiancé saw the listing the day it was posted. He emailed the agent and got connected with the owners. The owners showed him the place, and he showed the documents. They were the first to contact the owners and they got the apartment. Emily says the process is similar in Seattle. Who arrives first and drops off the information and checks gets the place.

24:00 How much are you making as a postdoc?

Sushmitha makes $50,760 annually. This is the University of California, San Diego postdoc pay rate. It is 10% higher than what the National Institutes of Health recommends for postdoc pay. Monthly, this pay is about $4000 but after taxes and health insurance, it is $3200 take home pay. She says there wasn’t state tax in Tennessee, but California has both state and federal tax. She is an employee with a W-2 and pays social security tax.

Emily shares the example of her husband’s pay after graduate school. His salary was a 40% gross increase but a 20% net increase after taxes and health insurance. You have to take these new costs into account.

26:14 What else do you want to tell us about this transition?

Sushmitha says it’s good to talk to people and know about the city you’re moving to. With the high cost, it was a mental adjustment. She has a hard time with the how much she pays for the apartment and gas. Gas in San Diego is closer to $4 per gallon. Mentally, you have to prepare yourself for higher costs. You think you’ll be able to have leftovers for savings, but it is hard. She mentions that people with computer science jobs in San Diego make more money and may have a different financial situation. But as a postdoc, the financial situation is much tighter. She says they are trying to save money for the wedding, but it is difficult. You have to be prepared for the first year of living in a high cost city.

If you’re moving to a city with well-paid jobs, don’t talk to the people in those position. You need to talk to postdocs and graduate students to know how they live. Sushmitha shares that there are free shuttles for UCSD and everything is walkable. Emily says you can’t apply the same lifestyle from one place to another, and you need a mental adjustment. Talking to your peers is helpful.

30:29 Anything else about your adjustment to postdoc life?

In graduate school, you have a cohort and form tight friendships. As a postdoc, you are more independent and it is harder to make friends. She went to a networking event, but the new postdocs just wanted to make friends instead of network. Emily shares that it is hard to make friends as an adult after moving to a new place.

33:18 Final Comments

Anyone who is making a big move will benefit from this conversation.

33:56 Conclusion

Weird Tax Situations for Fellowship Recipients

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One of the most puzzling tax scenarios that is common in academia but almost unheard of outside of it is fellowship funding because it neither a wage nor self-employment income. Fellowships frequently pay the stipends and salaries of grad students and postdocs, but also apply to some other kinds of trainees that aren’t considered students or called postdocs. This post explains the weird tax situations for fellowship recipients and how to resolve them. I’ll clarify right up front that you do need to incorporate your fellowship income into the gross income you report on your tax return, and you almost certainly will end up paying tax on it (unless your total income is very low or you have lots of other deductions/credits).

weird tax fellowship

Further reading/viewing:

I have to define my terms up front here because “fellowship” is used variously inside and outside of academic research, and these weird tax situations don’t always apply. What I’m talking about is when your income from your academic/research role is not reported on a W-2 (and you’re not self-employed). Often, though not always, winning a fellowship generates this kind of income. The NSF GRFP and DoD NDSEG are probably the most well-known examples of this type of income at the graduate level for STEM fields. Basically, you’re being paid because you won an award, not because you are directly trading work or time for money. This kind of income can come from training grants and other kinds of grants as well as fellowships, and in those cases you might or might not be labeled a fellow. If your income is reported on a W-2, whether it’s called a fellowship or not, this post doesn’t apply to you!

Personally, over my time in/near academia, I received non-compensatory pay on five occasions:

  • I was postbaccalaureate fellow at the NIH for a year between undergrad and grad school, and my income was reported on a 1099-G.
  • I was on a training grant in my first year of grad school, and my income was reported on a 1099-MISC in Box 3.
  • I won an internal fellowship for my second year of grad school, and my income was reported on a 1099-MISC in Box 3.
  • I was paid from my advisor’s discretionary funds in my sixth year of grad school, and my income was reported on a 1099-MISC in Box 3.
  • I was a Christine Mirzayan Science and Technology Policy Fellow at the National Academy of Engineering, and my income was reported on a 1099-MISC in Box 3.

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Receiving Unusual Tax Forms

The way to definitively tell that you’re receiving non-compensatory income is that you don’t receive a W-2 at tax time for your income, which was likely paid similarly to a regular salary or perhaps in a lump sum per term. Instead, you might see your income reported on some other strange tax form:

  • 1098-T
  • 1099-MISC

There are other possible mechanism for this reporting; these are the two most commonly used within universities.

Neither of these forms was designed for reporting fellowship income; neither does it very well, but they do get the job done if you know what you’re looking for.

1098-T

A 1098-T, which is issued to some students depending on your university’s policies, is sort of a clearinghouse form for the sum of your fellowships/scholarships/grants received (in Box 5) and also the sum of the qualified tuition and related expenses that were paid (Box 1) to your student account. Your fellowship income might be lumped in with your scholarships in Box 5, which makes them a little hard to parse, or Box 5 might only include your scholarships (see next section if so).

The good thing about the 1098-T if it includes your fellowship income is that it does put front and center two of the important numbers you’ll need to work with when you prepare your tax return, the sum of your non-compensatory (fellowship, scholarship, and grant) income (Box 5) and a subset of your Qualified Education Expenses (Box 1). You don’t really need to know what your fellowship income was independent of your additional scholarship/grant income See Weird Tax Situations for Fully Funded Grad Students for more details about working with the 1098-T.

1099-MISC

The 1099-MISC is a super confusing form to receive for fellowship income.

First, any non-academic who hears/sees that you have income reported on a 1099-MISC is going to think you’re self-employed. Self-employment/contractor income is the most common usage for the 1099-MISC, but that income is reported in Box 7. Fellowship income usually shows up in Box 3, “Other income,” although occasionally it does show up in Box 7. If you are a grad student or postdoc, you are not self-employed; do not pay self-employment tax!

Further reading: Grad Student Tax Lie #2: You Received a 1099-MISC; You Are Self-Employed

Second, the instructions for the 1099-MISC tell you to (“generally”) report your Box 3 “Other income” in the “Other income” line on your Form 1040 Schedule 1 Line 21. You can do it that way and your tax calculation will turn out correctly in a lot of situations, but it’s more correct to report the income explicitly as fellowship/scholarship income. 1099-MISC Box 7 income that is definitely fellowship income should be reported as fellowship instead of as self-employment. In both of these cases, it’s less confusing for the IRS and will possibly enable you to take more educational tax breaks.

Further reading:

Receiving No Tax Forms

Going along with the theme of not receiving a W-2 at tax time, you might very well not receive any tax form at all! It’s very common for there to be zero communication between the organization that pays the fellowship and the fellowship recipient. Other times, the fellow might receive what I call a “courtesy letter,” which is just a short, informal letter stating the amount of fellowship money paid.

Further reading: What Is a Courtesy Letter?

Fellows who don’t receive tax forms or whose universities/institutions don’t communicate with them at all about their personal taxes may feel completely adrift. They have no idea where to even start with preparing their tax returns. Many pay no taxes at all (if you know someone like that, send them this article!) since it takes a certain level of awareness of your tax responsibility to even wonder if you need to pay income tax. Even those who suspect they need to report and pay tax on their fellowship income might be daunted by the task of figuring out from scratch exactly how to do that.

Further listening: Do I Owe Income Tax on My Fellowship?

But it’s really a simple process to carry out if you know what to do! You should be able to find the amount of fellowship income you were paid for the whole year from your bank records. If you’re not a student, you just straight report that number in Form 1040 Line 1 with “SCH” written next to it. If you are a student, you have to work with your other scholarships and qualified education expenses a bit before reporting a number for your non-compensatory pay; see Weird Tax Situations for Fully Funded Grad Students for more details on that.

Further reading: Where to Report Your Grad Student Income on Your Tax Return (applies for non-student fellows as well)

Quarterly Estimated Tax

In my observation, most fellowship recipients have the responsibility of paying quarterly estimated tax, and many, many, many neglect to do so. If you need one level of awareness to even understand you’re supposed to pay tax on your fellowship income, you need an even higher level of awareness before you follow through on paying quarterly estimated tax. In fact, if the organization providing you the fellowship didn’t mention this, it’s not a water cooler topic around your department, and/or you’ve never been self-employed, you almost certainly wouldn’t know to do it.

The basic principle here is that the IRS expects to receive tax payments throughout the year, not just in April when your tax return is due. If you owe enough additional tax at the end of the year (and don’t qualify for an exception), the IRS is going to demand not only your tax payment but late fees and interest as well.

The main system for sending tax in to the IRS is tax withholding on a normal paycheck. If you don’t do that or your withholding isn’t sufficient, you’re supposed to file quarterly estimated tax. Basically, you send in a payment (no forms need to be filed) to the IRS four times per year to make sure you don’t have too much extra tax due when you file your yearly tax return. You should work through the estimated tax worksheet in Form 1040-ES to figure out if you are required to pay quarterly estimated tax and in what amount; you can also find the instructions for filing it in that form.

Taxable Compensation and Earned Income Tax Breaks

Some of the tax breaks the IRS offers are contingent on the type of income you have, and fellowship income (not reported on a W-2) does not necessarily qualify.

Individual Retirement Arrangement

To contribute to an Individual Retirement Arrangement (IRA), you (or your spouse) must have “taxable compensation.” Unfortunately, while taxable, fellowship income does not qualify as “compensation” (Publication 970 p. 5). So if your only income for a whole calendar year is fellowship/non-compensatory income and you’re not married to someone with taxable compensation, you aren’t eligible to contribute to an IRA in that year.

Further reading:

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) or Earned Income Credit (EIC) is a credit extended to low-income individuals and families. If your household income is quite low and/or you have one or more children, you might be able to receive the credit. As the name implies, you need “earned income” to qualify for the EITC. Unfortunately, fellowship/scholarship income is not considered “earned income” (Publication 596 p. 18). Puzzlingly, having zero earned income disqualifies you from the credit, but having too much non-earned income also disqualifies you from the credit. The definition of earned income also plays into the calculations for the Child Tax Credit and Additional Child Tax Credit.

Further reading: Grad Student Tax Lie #8: You Can Claim the Earned Income Tax Credit

Dependent Status

When you are trying to determine if you should file a tax return as an independent adult vs. a dependent of your parents, it is more difficult to qualify as independent with fellowship income rather than an equal amount of W-2 income. (This only applies to students.) While education expenses count as part of the amount of money that goes toward your “support,” scholarships and fellowships that you won do not count as you providing your own support.

Kiddie Tax

Fellowship income counts as unearned income for the purposes of being subject to the Kiddie Tax. If you are under the age of 24 on December 31 and a student, your “unearned” income exceeding $2,100 may be subject to a higher tax rate than the ordinary rate.

What other weird tax situations have you encountered due to your fellowship income?

Using Data to Improve the Postdoc Experience (Including Salary and Benefits)

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In this episode, Emily interview Dr. Gary McDowell, the executive director of Future of Research. Future of Research is an advocacy organization that uses data to empower early-career researchers. Gary outlines the ongoing work at Future of Research before diving into the details of their recently published study on postdoc salaries. Emily and Gary discuss the complexities around categorizing and counting postdocs as well as the interesting results from the data Future of Research acquired by Freedom of Information Act requests. Current postdocs can contribute to this ongoing project by submitting their salary and benefits data to the Postdoc Salaries database.

 

Links mentioned in episode

postdoc salaries

0:00 Introduction

1:07 Please Introduce Yourself

Dr. Gary McDowell is from Northern Ireland and Scotland. All of his undergraduate and postgraduate education was completed in the United Kingdom. He moved to the United States to become postdoc. First, he worked at Boston Children’s Hospital, then he worked at Tufts University in the Boston area. As a postdoc in the United States, Gary became interested in the scientific system itself, such as setting scientists up for success and producing scientists, not just science. He experienced the frustration that many people feel with the scientific system and its hyper competition.

Now Gary is the executive director of the nonprofit Future of Research. Their mission is to empower early career researchers with evidence to help them change the research system and the enterprise they experience.

3:00 Can you give us an overview of Future of Research and the organization’s work?

Gary is the only staff member of Future of Research. The board of is comprised of twenty early career researchers. The organization originated with a conference to bring early career researchers together to discuss ways to reduce hyper-competition in biomedicine. They held conferences around the country and realized the need for a group that has these conversations. The nonprofit provides data and evidence to early career researchers to help them make better choices and to educate the rest of scientific community of the realities our generation is currently experiencing. Their work is done by the board and volunteers.

Future of Research has worked on two major projects which came out of local meetings. The project “Who’s on board?” aims to get more early career researchers into leadership positions, starting with scientific societies. Through this project, Future of Research seeks to generate a network of future leaders for scientific organizations to tap into. They are working on a project to address mentoring, because it is one of the biggest concerns of early career researchers. Junior faculty often ask, “How do I find out more about how to mentor and manage people?” Junior faculty are expected to be mentors, but don’t know how to. Future of Research will host a summit in Chicago to bring together people who work in this space and who research mentoring. They will discuss what grassroots action they can take to make sure institutions are putting mentoring at the center of their interests.

Future of Research has been responsive to needs that arise. They are beginning a project to examine peer review and address this phenomenon of grad students and postdocs essentially ghostwriting a peer review report that is then submitted to a journal under someone else’s name. This is a problem of appropriate scholarly recognition, but at the same time the academic community hears there are not enough reviewers. Journals are crying out for more reviewers, but there is lack of transparency about who’s doing reviews, creating barriers to journals having names of potential reviewers. Surveys suggest that principle investigators are not trained in peer review, their practices come from assumptions, and there is generally lack of clarity of expectations in the peer review process.

Future of Research has just finished a postdoc salary project. It started when they formed the nonprofit. At the time, there was a change to federal labor law being proposed. The change was going to affect postdocs by raising their salaries, or by causing institutions to have postdocs clocking in and out and tracking time. Future of Research watched the push to raise postdoc salaries, and started following what institutions would do in response. They had the question about what are the actual salaries that people in postdoc positions have?

8:34 What is your recent paper and where can people find it?

The title of their paper is “Assessing the landscape of U.S. postdoctoral salaries.” It’s open access in the Studies in Graduate and Postdoctoral Education, Emerald Insight Publishing Groups.

9:07 What is a postdoc?

According to Gary, the PhD is when the trainee is learning how to do science, how to carry out research, how to do experiments, and analyze,. The PhD is for learning the nuts and bolts of being a scientist. The postdoc is intermediate, after the PhD and before the professor position. Gary’s opinion is that a postdoc should be considered as a period when you should be thinking about your own research goals and how to take those foward. Postdocs should be learning under the mentorship or apprenticeship of an investigator. Postdocs should be learning how to manage a group, mentor people, manage budgets, write grants, and lead a team.

However, Gary says that the postdoc is more likely a period of further research. Many people change field and get experience in another research group. Postdocs are often trying to get a certain number of published papers. Postdocs are trying to demonstrate they can succeed in a different lab and accrue credentials to get a faculty position to start as a professor.

Emily adds that there are eleven different common titles under which postdocs can be hired. There is a discrepancy between how employers see postdocs and how postdocs see themselves. What level of awareness do universities have around their own postdocs?

11:55 How was the idea for a project to assess postdoc salaries formed? What question were you asking?

When the team at Future of Research was looking at policies that were being updated in response to labor law, they realized that these policies at an institution don’t tell us necessarily what people are getting paid. Though the institution has a policy about postdoc salaries, actually paying postdocs that amount requires adherence to policy and someone following up to enforce policy. The team saw a pre-print paper by Rescuing Biomedical Research, another nonprofit, which looked at National Science Foundation data on number of postdocs and concluded that the number of postdocs in decline. They questioned whether there is truly a decline, or instead a bubble of people staying in postdoc positions for longer. These questions led them to start the project to collect data on postdoc salaries.

The team at Future of Research found that institutions are doing a terrible job of reporting year to year how many postdocs they had. While institutions were receptive to policy changes, if the institutions don’t know who the postdocs are to begin with, will people fall through the cracks? Will the policies actually be reflected in reality? The institution could recommend salary, but never follow up.

Institutions are also in a constant argument over whether postdocs are employees or trainees. Unfortunately, it seems postdocs are employees when it suits, such as when the institution needs to keep postdocs out of things they need to do for students, but postdocs are trainees in terms of lower salaries and receiving no benefits.

14:18 What position counts as an employee or not an employee?

Gary explains that whether a position is designated as an “employee” is complicated by where the money comes from. Postdocs may be “staff” on a grant, or postdocs may be on fellowships of various kinds. When postdocs are on fellowships or paid directly, they are usually referred to as trainees, typically lose benefits, and the institution says they are no longer an employee. The U.S. Department of Labor created a specification about who is an employee, specifying that it’s not who pays you, it’s the nature of the work. The Department of Labor made this specification because some institutions tried to designate postdocs as fellows to get out of the new labor law. The Department of Labor explicitly sent this message to the National Institutes of Health, stipulating that the NIH had to raise fellowship stipend under the new law.

17:08 What did you do for the postdoc salaries project?

The team from Future of Research wanted to analyze postdoc salaries, but they learned that this information was not easy to find. They carried out Freedom of Information requests at public institutions. They contacted the Freedom of Information or Public Records offices at public institutions, which were legally required to give out data like this. They asked for the position title and salary of everyone who was a postdoc, on date of December 1, 2016 when the new labor law was due to come into effect and changes were likely to happen. This method forces the institution to provide information, and this method served as an internal metric of whether universities know what postdocs are. Certain institutions didn’t know what a postdoc was, and asked Future of Research to explain what a postdoc is. Future of Research cross checked the information they received from Freedom of Information requests with the National Science Foundation data on postdoc numbers.

20:05 What was your analysis of the data from public institutions?

Future of Research had a data scientist on the team, who analyzed the distribution of salaries. They brought out patterns by geographic region, by gender, and by title. They examined what variables were affecting the salaries. Their aim was to assess the landscape and figure out what salary distribution looked like. This could set the bar to work from for efforts going forward.

21:07 What were the broad conclusions of the postdoc salaries project? Was there anything surprising to you?

Gary says they got broad distributions of postdoc salaries. Nature published a write-up that emphasized that postdoc salaries vary wildly by institution. Most people received between $40,000 and $49,999 annual pay. They found that 22% of all their data was within a $25 range around the new National Institute of Health minimum stipend, which was very close to the proposed salary threshold is under the federal labor law. Gary shares that when Future of Research considers the levers they need to pull to raise postdoc salaries, it is a very useful finding that the median salary of all postdocs across the US, regardless of field, was pegged to minimum NIH National Research Service Award stipend amount. The most effective policy lever for raising postdoc salaries in the U.S. is to get NIH to raise the NRSA award stipends.

Emily emphasizes that so many universities go off the NIH minimum salaries, even though it’s just a recommendation, and it’s just a minimum. She points out that this minimum doesn’t take into account different cost of living. Is this the minimum for Bethesda, Maryland, where the NIH is located? Institutions go off this as if it is absolute truth. Gary brings up that in December 2018, NIH raised minimum salary. Now the minimum is $50,000, this amount has been recommended for quite some time. Gary and Jessica Polka, president of Future of Research, are on the National Academies study for the Next Generation Researchers Initiative. They will be releasing recommendations informed by this data.

Gary was surprised by how many salaries were in the $50,000 range. They broke down the distribution by field for a large subset and found no real field dependence for the salaries. People would expect the humanities to be lower, but the humanities were not lower. Gary was surprised by how often biomedical engineering salaries were in the lower end of the distribution. Gary wonders who negotiates, and if there’s a disparity in who’s negotiating. He mentions that talking about money in academia is stigmatized.

Emily created the website PhD stipends with her husband. Now it has over 4000 entries in it. It is a great place to go for prospective graduate students. She has thought there should be the same resource for postdocs. They have started postdocsalaries.com for people to self-report their salaries. Future of Research obtained information from public institutions, but they are completely missing private institutions. Self reporting also provides a check on whether what the institution reports matches what postdocs report. Postdocsalaries.com is a useful self reporting tool, that helps other people compare salaries and gives them the opportunity to comment on issues.

Gary discusses that when he gives a talk at institution, he loves to bring up money. He wants to break the stigma that ‘we’re not supposed to talk about this’ and tell people that this should be one of the questions that you ask your prospective PI. Gary says how that question is answered will tell you a lot about the PI as a person. You should look for someone who responds “I would love to pay you more, we can look into fellowships or I can find opportunities to pay you extra,” and steer clear of potential advisors who say “This isn’t about the money.” This is part of gathering information for your decision.

37:08 What are some action steps that postdocs can take today to improve their salaries, benefits, or working conditions?

Gary says always having data at hand is useful for individuals and groups to advocate. With data, you can approach an institution with the salaries that people are getting in your field, and point out that this is what the policy says so this is the expectation. This is action you can take on the personal level.

When Future of Research compared institutions publicly, there were administrators who could now use the data to say that the institution is being compared to everyone else, if they want to be competitive for postdocs they need to raise postdoc salaries. For groups looking to push for change in an institution, there are a number of lines of evidence. Gary says that comparing with peer institutions is useful. The most recent recommendations are that postdoc salaries should be at least $50,000 then adjusted for cost of living, then for your years of experience.

Listeners should go to postdocsalaries.com to get involved and learn more.

40:56 Conclusion

What to Do with Your Higher Take-Home Pay

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Whatever you might think of the Republican tax bill from last fall, it has now been passed into law and has already started to affect your income taxes for 2018. In many cases, your tax burden as a graduate student or postdoc will decrease for this year compared to last year, which means you’ll have more money in your pocket starting with your January or February paycheck.

higher take home pay

Will Your Take-Home Pay Increase?

A few weeks ago, I calculated what the tax burden would be for single or married people with no dependents with the income ranges that are most common for graduate students and postdocs ($15,000/year to $110,000/year). I found that across those income ranges, the tax burden decreased by 20-35%. Families with children under the age of 17 would see an even further decrease due to the larger Child Tax Credit.

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To perform these calculations, I assumed that you will take the standard deduction on both your 2017 and 2018 taxes. If that assumption is true (and your income is in the above range), you should see a decrease in your tax burden.

The taxpayers who may see an increase in tax due under the new law are those who currently itemize their deductions, such as households who have in the past deducted more than $10,000 in property tax and state and local taxes together. Another group that may see a higher tax liability under the bill (depending on the rest of their situation) is parents of dependent children aged 17 and older; the exemptions they used to take have been eliminated, and the expanded child tax credit is only for children up to age 16.

Further Reading:

However, I think my assumptions are valid or at least reasonably accurate for the vast majority of graduate students and postdocs, who tend to be younger with lower incomes/expenditures. It’s safe to say that most graduate students and postdocs will see a higher take-home pay in spring 2018 than they did in fall 2017; effectively, you will see a ‘raise.’

What to Do with Your Income Increase

I have no shortage of ideas of actions you can take with your increased take-home pay, whether it’s $14.50/month (for a single person with no dependents earning $20,000/year) or $109/month (for a married couple with no dependents earning $70,000/year). Chances are, last month you didn’t have a lot of money lying around begging to be put to use, and starting pretty soon you will have some non-spoken-for money to work with.

Don’t let this money just disappear into the ether! Allocate it to something specific. If possible, I recommend you set up an automated transfer from your checking account to wherever the money needs to go so that you relieve your willpower/memory of the responsibility of making the transfer manually.

Financially Responsible Action Items

Add to Your Emergency Fund

If you don’t yet have a dedicated emergency fund with a balance of $1,000 (or a higher target, e.g., three months of expenses), use the extra money to beef up your emergency fund! When (not if!) life throws you a curveball, your emergency fund is what stands between you and serious financial consequences.

Further Reading:

Start Investing/Add to Your Investments

YES it is possible and worthwhile to start investing with just a few dollars per month and it’s also amazing to even incrementally increase your existing regular savings rate!

Using this compound interest calculator to estimate, adding just $25/month to your investments for one year, at an 8% rate of return in 50 years that $300 will become over $13,000! If you kept up that higher savings rate for all 50 years, it becomes over $172,000! Sure, that’s not all the saving/investing you will need to do for your retirement, but even a small regular savings rate helps a lot.

Further reading:

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Pay Down Debt

Similar to the investing example, a few extra dollars per month thrown at your existing debt can accelerate your progress to debt freedom.

If you currently had $500 in outstanding credit card debt and were making the minimum payment of $25/month, it would take you 23 months to pay off the card. But if you instead paid $50/month, you would knock out that debt in 11 months!

While you are not required to make payments on deferred student loans, if they are unsubsidized they are currently accruing interest. For example, if you had $10,000 of deferred unsubsidized loans at 6.8% interest and five years until graduation (and the end of the deferment), putting $25/month toward your loans would decrease the $14,036 you would have owed at the end of grad school to $12,255 (the $1,500 you paid decreased your debt by $1,781).

Further reading:

Invest in Your Career

Instead of using your money to increase your financial security or net worth directly, you could double down on your PhD training and invest in your career. Not many universities provide adequate career exploration and training for PhD students and postdocs, especially for “alternative careers.” You could use your increased cash flow to save up to attend a key conference in your field (if you’ve already used the funding available to you) or for a career path you’d like to get into. You could join a membership site like Beyond the Professoriate to help you transition out of grad school/your postdoc/your current job and into a fulfilling job. You could take a one-time seminar on negotiating a job offer; think of the ROI on that training!

Not-Financially-Focused-But-Still-Good Ideas

There are plenty of good ideas of what to do with money that will have a positive impact on your well-being rather than your bottom line specifically.

Treat Yo Self

Set aside a bit of time to consider what would give you the most ‘bang for your buck’ with this extra cash flow in terms of increasing your satisfaction in your life. You could use it on a monthly basis to take a fancy exercise class, have a special date night, enroll in a new subscription service, or care for a small pet. You could save up over the course of a few months or the year and take an extra flight to see loved ones, purchase new electronics (my husband is currently eyeing an ergonomic mechanical keyboard!), or update your wardrobe. What will mean the most to you is obviously quite personal, but whatever you choose, the key thing to do is to earmark the extra money for your choice so that it doesn’t get swept up in the rest of your expenses.

Give

At any point in 2017 or earlier, did you come across a non-profit or certain cause that you had the impulse to donate to, but you just didn’t have the available funds? This is your opportunity! You can now set up a recurring donation to a group whose work is meaningful to you. Non-profits really appreciate steady contributions that they can plan on. Alternatively, you could set aside a dedicated savings account with a monthly automatic savings rate that is earmarked for giving. My husband and I did this in graduate school for one-off donations that we would make a few times a year, and it was a wonderful feeling to be able to say “yes” when an opportunity presented itself without having to scramble or make hasty calculations.

Don’t let this opportunity to act intentionally with your increased cash flow pass you by! It might be quite a while before you get another increase in your take-home pay so make the most of it.

New Fellow? Pay Your Quarterly Estimated Tax for the First Time This Week!

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Did you start receiving a fellowship this academic year as a graduate student or postdoc? First, congratulations! Second, I must clear up a pernicious misconception about fellowships in the US: you do owe federal income tax (and probably state, too) on your fellowship income. If income tax is not being withheld from your stipend/salary (and the majority of universities do not offer withholding on this type of income), you may be responsible for making quarterly estimated tax payments throughout the year. The next payment is due tomorrow, January 16, 2018! This post will guide you through how to determine whether you owe quarterly estimated tax and how to pay it if so.

Do You Receive Your Gross Income?

The IRS expects to receive income tax payments throughout the year, not just each April. Employees almost always have income tax withheld from their paychecks; instead of receiving their gross (full) income, their employer sends approximately the amount of tax the employee owes from each paycheck to the IRS and the employee receives the rest (net income).

Fellowship recipients (when the term is used conventionally; perhaps not universally) have non-compensatory pay and are not considered employees of their universities. Most universities do not offer income tax withholding on fellowship stipends/salaries. Taxpayers who do not have income tax withheld from their salaries (or who have too little withheld compared to the amount of tax they owe) are sometimes responsible for manually sending money to the IRS. This is called making quarterly estimated tax payments.

If you are a fellowship recipient (e.g., the NSF GRFP), your first step is to confirm that you are in fact not an employee, and your second step is to check whether you are receiving your gross or net income.

Step 1: The easiest way to determine if you are an employee (or rather, confirm that you are not) is to check whether you receive a W-2 for your fellowship income. (If you had an assistantship in this calendar year, you will receive a W-2 for that position, so be sure to check specifically about your fellowship income.) However, if you just started your fellowship in the 2017-2018 academic year, you aren’t due to receive (or not receive) your tax forms until the end of January 2018, and the estimated tax payment is due in mid-January. Your next best option is to inquire into what tax form you will receive for your fellowship stipend/salary. Non-compensatory pay will appear on a 1098-T, 1099-MISC, or courtesy letter or will not be reported in any way. Compensatory pay (indicating that you are an employee) will appear on a W-2. You should try asking your departmental administrative assistant, university fellowship coordinator, Bursar’s Cashier’s office, and/or payroll office. You will most likely be told that they “cannot give tax advice,” but confirming what type of tax form your income generates is not advice.

Step 2: Having confirmed that you are not an employee (if you are, you don’t need this post!), double-check the stipend/salary amount that hits your bank account. If you multiply it by the number of pay periods over which you will receive it, is it equal to the gross fellowship stipend/salary you were told you would receive or is it less? If it is less, did you at any point file a W-4 (e.g., when you had an assistantship)? You may be one of the few students/postdocs who has income tax withheld from a fellowship stipend/salary. As stated earlier, a small minority of universities do offer withholding on fellowship income, and they should use a W-4 to determine the amount of withholding.

If you are not an employee and are not having income tax withheld from your fellowship stipend/salary, you may need to make quarterly estimated tax payments.

Are You Responsible for Paying Quarterly Estimated Tax?

The IRS explains who is responsible for filing quarterly estimated tax on Form 1040-ES p. 1.

Right off the bat, you are not required to pay quarterly estimated tax if in the previous tax year your total income was zero or you did not have to file a tax return (and your return covered all 12 months). For example, if you were a student for all of 2016 and either didn’t have an income or your income was so low that you didn’t have to file a tax return, you aren’t required to make quarterly estimated tax payments.

If that first provision doesn’t apply to you, the IRS has a helpful flow chart on Publication 505 p. 24.

Publication 505 Figure 2-A

At this point, you’re going to have to do a few calculations to determine what amount of additional tax you owe for the year (additional to any withholding you already had). You simply need to fill out the worksheet on Form 1040-ES p. 8 for your household. It looks sort of involved but if you have a simple financial life you won’t actually need to put very many entries into the worksheet. You will need at your fingertips your 2016 tax return (or at least the total amount of tax you paid), your gross income for 2017, the amount of income tax you had withheld in 2017 (if any) and an educated guess as to your 2017 deductions and credits (your 2016 return will be helpful for this).

Once you calculate the amount of tax you owe in total for 2017 (Form 1040-ES line 13c), you can determine whether you are responsible for paying quarterly estimated tax.

First, look up the total amount of tax you paid in 2016. Second, take your total tax due for 2017 and multiply it by 90%. The smaller of these two numbers is the amount of tax you need to pay throughout 2017 to avoid a penalty (Form 1040-ES Line 14c).

Subtract the amount of income tax you had withheld in 2017 (Form 1040-ES Line 15) from the amount you need to pay to avoid a penalty. If the result (Form 1040-ES Line 16) is less than $1,000, you are not required to make a quarterly estimated tax payment. If the result is greater than $1,000, you are required to make a payment.

Please note that just because you are not required to make quarterly estimated tax payments does not mean you will avoid paying tax the whole year, only that the additional tax due does not have to be paid until you file your 2017 tax return this spring. Now that Form 1040-ES has given you some warning, use the next few months to prepare to make that lump sum income tax payment.

How to Pay Quarterly Estimated Tax

If you are required to make a quarterly estimated tax payment, the calculation is pretty simple since this is the last payment due for 2017! You should make a payment for all the additional tax due that you calculated you owe (Form 1040-ES Line 16a). If your calculations were exact, when you file your 2017 tax return in the spring, you won’t receive a refund or owe any additional tax. More likely, filling out your full tax return will bring to light a few adjustments in your calculations, so you may end up receiving a small refund or paying a small amount of additional tax.

The easiest way to make your quarterly estimated tax payment is online at www.IRS.gov/payments (find all your payment options on Form 1040-ES p. 3-4 or Publication 505 p. 32-33).

If you were unaware that you had any income tax liability on your fellowship income and are unprepared to pay what you owe by January 16, 2018, don’t avoid the issue! Give the IRS a call and they may be able to work with you to minimize the penalties you owe (though not the interest).

Calculating your quarterly estimated tax is not very difficult; the most challenging aspect is knowing that you’re supposed to do it! If you are a new fellow and this is your first time making a quarterly estimated tax payment, rest assured that it will be easier going forward. You first quarterly estimated tax payment for 2018 is due on April 17, 2018. You’ll want to freshly fill out the 2018 1040-ES once it’s available, but it should be similar to the form you just worked through.

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