Personal Finance for PhDs

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fellowship

The First Step to Complete Your Grad Student Tax Return (2018)

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There is one vital step grad students need to take when starting to prepare their tax returns. It’s a super simple step, but most often overlooked, and skipping it can lead to an inaccurate return or even overpaying tax. This is the step that you take before you start feeding any numbers to your 1040, your tax software, or your tax preparer, and it is to find and categorize all of your income sources (funded grad students have at least two!).

If you found this video insightful and you want to take the next step to completing your tax return – including one trick to reduce your tax due that your tax software or tax preparer can easily miss – register for my workshop, “How to Complete Your 2019 PhD Trainee Tax Return (and Understand It, Too!).”

grad student tax return step

How Much Tax Will I Owe on My Fellowship Stipend or Salary?

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If you have recently started receiving a fellowship for your graduate or postdoc stipend or salary, you are likely aware that income tax is not being withheld for you. While your fellowship income is taxed as ordinary income at the federal and usually state levels, only in rare cases do universities actually offer you automatic tax withholding. Therefore, it falls to you to manually pay your own tax due either quarterly or once per year. But how do you figure out how much tax you will owe on your income?

Further reading:

monthly tax fellowship

When you start receiving a fellowship and in January of every subsequent year, you should first determine whether you are required to pay quarterly estimated tax both at the federal and state levels. Whether the answer is yes or no, your next step is to calculate how much you should set aside from each paycheck to pay your ultimate tax bill(s) for the year and set up your own system of tax withholding (e.g., an automated transfer to a dedicated savings account following your receipt of each paycheck). Then, you will be prepared to make the necessary payment when the due date arrives.

Further reading:

This post details three methods by which you can calculate the approximately amount of federal tax you will have to pay on each month of fellowship stipend or salary income that you receive.

Method 1: Use Form 1040-ES

Form 1040-ES that you previously filled out is very useful for figuring out how much you should set aside from each paycheck to pay your federal income tax bill. Form 1040 Line 11c tells you the amount of tax you have estimated that you will owe for the year (above what you and/or your spouse will have withheld). Simply divide your value in Line 11c by the number of fellowship paychecks you’ll receive in the calendar year; that is the amount of money you should set aside for federal income tax from each paycheck.

(Note: You might be tempted to divide your value in Line 15, which is how much you’re required to pay in estimated tax in each quarter, by the number of pay periods in each quarter. However, doing this will cause you to owe additional tax when you file your yearly tax return of at least 10% of the total estimated tax.)

Method 2: Use My Super-Simple Spreadsheet

Instead of referring to Form 1040-ES to calculate the amount of money you should set aside in tax, you can instead use a spreadsheet I made (sign up below to download it). It works for monthly and once-per-term fellowship income. (Disclaimer: I take no responsibility for your tax calculations!)

Method 3: Use the IRS’s Withholding Calculator

The IRS also provides a withholding calculator that has been updated for 2018. It asks you to enter your filing status, dependency status, job transitions, which credits you plan to take and their amounts, income, tax withholding, and amount of itemized deductions (if any).

This calculator is much more thorough than my simple spreadsheet above. If you have a complicated tax return, this is the more appropriate calculator to use to determine how much money you should set aside for federal income tax payments.

If you have a complicate financial life (e.g., a spouse with income, no income or a much higher income earlier in the year, extra credits or deductions), you should use either Form 1040-ES or the IRS calculator to help you determine how much money to set aside for tax from each paycheck because they take into account many of the elements that will be present on your yearly federal tax return. If you are a single-income household and have a simple financial life, my spreadsheet will get you the answer of how much money to self-withhold from each of your fellowship paychecks faster.

Whichever way you do the calculation, be sure to follow through on setting up your automated self-tax withholding. It’s the next best solution to having tax automatically withheld from your income by your university!

P.S. If you want to estimate how much you will pay in state tax as well as federal, try the Smart Asset calculator. (As of this writing, the calculator primarily reflects tax year 2017.) This calculator is also very simple, so it does not allow for the input of credits. It also includes FICA tax, which does not apply to graduate student fellowships and likely does not apply to postdoc fellowships. If you are using it specifically for estimating your state tax due, keep in mind that fellowship income is not always taxed as ordinary income at the state level. (For example, fellowship income is exempt from tax in Alabama.)

How to Find, Apply for, and Win a Fellowship During Your PhD or Postdoc

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Applying for fellowships is an essential component of your PhD training. My fellowship application advice is to apply for a few relevant fellowships as a prospective PhD student, whether you are coming from an undergraduate degree, master’s degree, job, or other fellowship. It’s also a great idea to keep applying for fellowships and grants throughout your PhD and postdoc for any years when you’re not already a fellow.

The advice in this article is on why, where, and how to apply for fellowships successfully. It has a particular focus on outside fellowships that are portable (you can use them at any institution), remunerative (they provide at least stipend/salary support), and broad (many research fields are eligible).

Fellowships at the graduate level are similar to scholarships at the undergraduate level in that they are awards that are given based on merit, and sometimes only a narrow slice of students is eligible. They are “free money” similar to scholarships and grants in the sense that they do not have to be repaid. What is different is that fellowships typically pay part or all of a PhD student or postdoc’s stipend/salary and may also include some money for tuition and fees. However, as a fellow you do have the responsibility of making progress in your research or else your fellowship is not likely to be renewed. PhD-level fellows are free to focus their attention solely on their research (in addition to classes in the early stage of training).

Further Reading:

Why Apply for Fellowships

Regularly applying for outside funding is an expectation in graduate school (and often before and after) that should be made more explicit. Even if you are fully funded by your program or group, you will benefit from applying for fellowships throughout your PhD and postdoc. The only reason to forgo submitting at least one fellowship application in a given year is if you are already funded by an outside fellowship in the upcoming year.

Further Reading: Why You Should Apply for Fellowships Even If You’re Fully Funded

There are numerous reasons apply for fellowships regularly, some of which apply even if you don’t ultimately win a fellowship.

1) A Higher Stipend/Salary

Often, outside fellowships are structured to pay a higher stipend than what is typically paid to a graduate student or postdoc. This is especially true for the prestigious, competitive, national fellowships. Winning an outside fellowship that awards a higher stipend/salary is one of the very few ways a graduate student or postdoc can secure a significant raise within the same career stage. Even if the fellowship pays a stipend/salary lower than the baseline amount for the department, typically the department will supplement the fellowship stipend/salary up to or even above the baseline pay as a gesture of appreciation to the student or postdoc for winning the fellowship.

2) Greater Independence

Depending on the PhD’s stage and department, an outside fellowship may confer an increased degree of research independence. For example, a fellow may be able to set up a new collaboration, pursue a side project, or complete additional lab rotations when a graduate student funded by another means would not be given permission. This is because the fellow’s funding is not tied to working on any specific project the way a grant would specify.

3) Negotiation Power

Virtually all PhD students and many postdocs assume there is no room for negotiation in their funding package. However, there are two points at which negotiation is possible: Upon admission to a program and upon winning an outside fellowship (best if combined). If you are funding yourself through a fellowship, that’s money that your advisor/department does not have to spend on you (assuming they would have), and that money has now been freed up for other purposes.

After finding out that you have won a fellowship, you can tactfully ask your advisor or department chair if it is possible for you to receive an extra benefit. You could ask for an increase in pay, a one-time or yearly bonus, or one of the extra degrees of independence listed above.

4) Excused from “Work”

One aspect of PhD funding that is not necessarily widely discussed is the difference between being funded by a fellowship and being funded by an assistantship.

A research assistant, teaching assistant, or graduate assistant is virtually always an employee of her university (as well as a student). You can be sure of this status if you receive a W-2 at tax time. The graduate student’s stipend or salary is being paid for work she does: teaching, research, or another type of service.

A fellowship, on the other hand, is an award, and there is not supposed to be any work requirement tied to it, although in practice the PhD student must of course make adequate degree progress.

There is not much of a functional day-to-day difference between graduate students funded by research assistantships in which the research is included in their dissertations and graduate students funded by fellowships. In both cases, 100% of the graduate student’s time (less time spent completing courses) can be devoted to his dissertation.

However, being funded by a fellowship makes an enormous difference in the day-to-day life of a graduate student who would otherwise be funded by an assistantship that requires non-dissertation-related work. That work requirement is typically 20 hours per week. Winning a fellowship excuses the graduate student from that work requirement, meaning that 20 hours per week can be devoted to research that furthers the student’s degree progress. This might very well shorten the time it takes for the student to complete his PhD.

5) CV-Booster

One of the unsung but most important benefits of winning a fellowship, particularly a prestigious national fellowship, is its effect on your CV. Once one fellowship committee has deemed you worthy of funding, that stands as a testament to your ability that is seen by every subsequent funding committee. Winning your first fellowship gives you momentum toward career success. Assuming you continue to be an excellent candidate, winning subsequent fellowships and grants becomes more likely.

6) Shows Initiative/Effort

In my opinion, applying for at least one outside fellowship concurrently with applying for graduate school is an unspoken requirement. Being able to say on your grad school application or in your interviews that you have applied for outside funding (even if you don’t ultimately win) shows the faculty members reviewing your application that you take initiative and are ambitious. Even once you are settled into a department and group in grad school, attempting to fund yourself will almost certainly be viewed favorably by your advisor, even if you are not awarded a fellowship.

7) Applying Forces You to Frame and Justify Your Research

Writing a fellowship application can be a wonder pause and possibly reset point in your research progress. You have to step back from your day-to-day work, think about the underlying motivations and aspirations for your project, and explain why they (and you) are worth being funded. This exercise alone is likely to benefit your research and experimental design.

8) Good Practice

The final benefit of applying for fellowships is that it’s good practice. If you stay in academia or research long-term, applying for grants is likely to become part of your regular work rhythm. You may as well start early, gain experience, and hone your message.

When to Apply for Fellowships

Most fellowship application deadlines are in the fall, though a few occur at other points in the academic year. Over each summer, you should create a list of the fellowships you plan to apply for in the upcoming academic year, including ones with deadlines later in the year. Create calendar reminders leading up to each fellowship deadline to ensure that your applications stay on track.

Where to Find Fellowship Opportunities

Your first stop for finding fellowship opportunities should be your research and/or program advisor (postdoc, graduate, or undergraduate). Ask him or her what fellowships you should consider applying to and what fellowships other students and postdocs at your same stage apply to. You can also ask your peers which fellowships they have applied to in the past or are applying to now.

Another great place to look are websites that maintain databases of fellowship opportunities. Your university or department may cultivate such a list. In the next section, I have provided my own list of broad fellowships to consider. Other great databases can be found at:

Finally, try a simple Google search with keyword combinations of “fellowship” or “scholarship” along with anything particular to you, such as your field, research interests, career stage, demographics, standout qualities, etc. You may find a fellowship or scholarship that is tailored to you that your peers wouldn’t qualify for and therefore overlooked.

When looking for fellowship descriptions and listings, always consider both the large, well-known programs that fund a lot of fellows and lesser-known opportunities that may be a good match for you in particular, either because of your demographics or your research area. All of the advantages of fellowship funding apply to both types.

Fellowship Programs for Graduate Students and Postdocs

Below is a list of portable fellowship programs that are granted to a large number of fellows each year in a broad array of fields. These fellowships provide full or nearly full levels of stipend/salary support, often in addition to tuition and fees.

American Association of University Women Dissertation Fellowships

  • Website
  • Fields: All
  • Eligibility: US citizen or permanent residents; applicant must identify as a woman; current PhD students who will complete their dissertations between April 1 and June 30
  • Award: $25,000
  • Number of Awards: Not specified
  • Deadline: November 15, 2023

American Association of University Women Postdoctoral Fellowships

  • Website
  • Fields: All
  • Eligibility: US citizen or permanent residents; applicant must identify as a woman; must hold a Ph.D., Ed.D., D.B.A., M.F.A., J.D., M.D., D.M.D., D.V.M., D.S.W., or M.P.H. at the time of application
  • Award: $50,000
  • Number of Awards: Not specified
  • Deadline: November 15, 2023

Department of Defense Science, Mathematics & Research for Transformation (SMART)

  • Website
  • Fields: Aeronautical and Astronautical Engineering; Biosciences; Biomedical Engineering; Chemical Engineering; Chemistry; Civil Engineering; Cognitive, Neural, and Behavioral Sciences; Computer and Computational Sciences and Computer Engineering; Cybersecurity; Data Science and Analytics; Electrical Engineering; Environmental Sciences; Geosciences; Industrial and Systems Engineering; Information Sciences; Materials Science and Engineering; Mathematics; Mechanical Engineering; Naval Architecture and Ocean Engineering; Nuclear Engineering; Oceanography; Operations Research; Physics; Software Engineering
  • Eligibility: Citizen of the United States, Australia, Canada, New Zealand, or United Kingdom; 18 years of age or older; Requesting at least 1 year of degree funding; Able to accept post-graduation employment with the DoD for every year of funding requested; Minimum cumulative GPA of 3.0 on a 4.0 scale; Enrolled in a regionally accredited U.S. college or university or awaiting notification of admission for fall term.
  • Award: 1-5 years of support; $30,000-46,000/year stipend, full tuition and fees, $2,500 health insurance allowance, $1,000 miscellaneous supplies allowance
  • Number of Awards: Not specified
  • Deadline: December 1, 2023

Department of Energy Computational Science Graduate Fellowship (DOE CSGF)

  • Website
  • Fields: Science & Engineering Track: Aeronautics, Astrophysics, Biological Sciences, Chemical Engineering, Chemistry, Electrical Engineering, Environmental Science, Materials Sciences, Mechanical Engineering, and Physics. Mathematics/Computer Science Track: applied mathematics, statistics, computer science, computer  engineering or computational science.
  • Eligibility: Prospective and first-year graduate students; US citizens or permanent residents; full time uninterrupted study toward a Ph.D. at an accredited U.S. university
  • Award: up to 4 years of support; $45,000/year stipend, full tuition and fees, professional development allowance of $1,000 per year
  • Number of Awards: not stated; there are ~110 current fellows
  • Deadline: January 17, 2024

Ford Foundation Dissertation

  • Website
  • Fields: Research-based programs, e.g., American studies, anthropology, archaeology, art and theater history, astronomy, chemistry, communications, computer science, cultural studies, earth sciences, economics, education, engineering, ethnic studies, ethnomusicology, geography, history, international relations, language, life sciences, linguistics, literature, mathematics, performance study, philosophy, physics, political science, psychology, religious studies, sociology, urban planning, women’s studies, and interdisciplinary programs
  • Eligibility: Previous Ford Foundation Predoctoral Fellowship recipient; Current PhD students who will complete their dissertations no later than fall 2024; Enrolled in an eligible research-based program leading to a Ph.D. or Sc.D. degree at a not for profit U.S. institution of higher education; US citizens, nationals, permanent residents, and DACA recipients; Indigenous individuals exercising rights associated with the Jay Treaty of 1794; individuals granted Temporary Protected Status; asylees; and refugees; committed to a career in teaching and research at the college or university level in the U.S.
  • Award: 1 year of support; $28,000/year stipend
  • Number of Awards: ~36
  • Deadline: December 12, 2023

Ford Foundation Postdoctoral

  • Website
  • Fields: Research-based programs, e.g., American studies, anthropology, archaeology, art and theater history, astronomy, chemistry, communications, computer science, cultural studies, earth sciences, economics, education, engineering, ethnic studies, ethnomusicology, geography, history, international relations, language, life sciences, linguistics, literature, mathematics, performance study, philosophy, physics, political science, psychology, religious studies, sociology, urban planning, women’s studies, and interdisciplinary programs
  • Eligibility: Individuals who held a previous Ford Foundation Fellowship; Individuals who completed or will complete their PhDs or ScDs between 12/08/2015 and 12/08/2022; US citizens, nationals, permanent residents, and DACA recipients; Indigenous individuals exercising rights associated with the Jay Treaty of 1794; individuals granted Temporary Protected Status; asylees; and refugees; committed to a career in teaching and research at the college or university level in the U.S.
  • Award: 1 year of support; $50,000/year stipend
  • Number of Awards: ~24
  • Deadline: December 12, 2023

Graduate Fellowships for Science, Technology, Engineering, and Mathematics Diversity (GFSD)

  • Website
  • Fields: Astronomy, Biomedical Engineering, Chemistry, Computer Science, Geology, Materials Science, Mathematical Sciences, Physics, and their sub-disciplines, and related engineering fields (Chemical, Computer, Electrical, Environmental, Mechanical)
  • Eligibility: Prospective and current graduate students available for two summer internships; US citizens with the ability to pursue graduate work at a GFSD university partner
  • Award: Up to 6 years of support; $20,000/year stipend
  • Number of Awards: Varies
  • Deadline: December 29, 2023

Hertz Foundation

  • Website
  • Fields: Applied physical and biological sciences, mathematics, or engineering
  • Eligibility: Prospective and first-year PhD students; US citizens and permanent residents
  • Award: Up to 5 years of support; $38,000/9-month stipend and full tuition; $5,000/year stipend for fellows with dependent children
  • Number of Awards: 15 in 2023
  • Deadline: October 27, 2023

Life Sciences Research Foundation

  • Website
  • Fields: Life sciences
  • Eligibility: PhD or MD/DVM recipients (awarded less than 5 years ago); US citizens working in any geographic location and non-US citizens working in US laboratories; begun (or will begin) working in your postdoc lab between August 1, 2022 and July 31, 2024; Postdoctoral training must be completed in a lab different from that of your graduate (thesis) lab
  • Award: 3 years of support; $66,000/year for salary and $11,000/year for research
  • Number of Awards: 18-27
  • Deadline: October 1, 2023

National Defense Science and Engineering Graduate Fellowship (NDSEG)

  • Website
  • Fields: Aeronautical and Astronautical Engineering; Astrodynamics; Biomedical Engineering; Biosciences (includes toxicology); Chemical Engineering; Chemistry; Civil Engineering; Cognitive, Neural, and Behavioral Sciences; Computer and Computational Sciences; Electrical Engineering; Geosciences; Materials Science and Engineering; Mathematics; Mechanical Engineering; Naval Architecture and Ocean Engineering; Oceanography; Physics; Space Physics
  • Eligibility: Prospective and current (first or second year) PhD students; US citizens and nationals
  • Award: 3 years of support; $3,400/month in stipend, up to $1,400/year in health insurance, and full tuition and fees
  • Number of Awards: Up to 500
  • Deadline: November 3, 2023

National GEM Consortium MS Engineering and Science Fellowship Program

  • Website
  • Fields: Science and engineering
  • Eligibility: Senior or graduate of an accredited engineering or computer science program; Minimum cumulative grade point average of 2.8/4.0; Agree to intern for two summers with sponsoring GEM Employer; under-represented students (American Indian/Native, African American/Black, Hispanic American/Latino); US citizens or permanent residents
  • Award: Employer Fellows: full tuition and fees; $4,000 living stipend per full-time semester up to 4 semesters; minimum $16,000 total stipend over the entire Master’s program; up to two paid summer internships. University Fellows: full tuition and fees; Associate Fellows: full tuition and fees; at least $8,000 stipend per year
  • Number of Awards: ~180 in 2022
  • Deadline: 2nd Friday in November

National GEM Consortium PhD Engineering and Science Fellowship Program

  • Website
  • Fields: Science and engineering
  • Eligibility: Senior, masters student, or graduate of an accredited engineering or applied science program; Minimum cumulative grade point average of 3.0/4.0; Agree to intern with sponsoring GEM Employer; under-represented students (American Indian/Native, African American/Black, Hispanic American/Latino); US citizens or permanent residents
  • Award: Employer Fellows: full tuition and fees up to the 5th year of the PhD; $16,000 stipend for one academic year, supplemented by university; a minimum of one paid summer internship. Associate Fellows: full tuition and fees; at least $16,000 stipend per year
  • Number of Awards: ~240 in 2022
  • Deadline: 2nd Friday in November

National Science Foundation Graduate Research Fellowship Program (NSF GRFP)

  • Website
  • Fields: STEM and STEM education
  • Eligibility: Pursuing a research-based Master’s or Ph.D. at an accredited United States graduate institution, with a US campus; Completed no more than one academic year of full-time graduate study; Graduate students can apply only once either in their first or second year; US citizens, nationals, and permanent residents
  • Award: 3 years of support; $37,000/year in stipend, $12,000/year to institution
  • Number of Awards: 2,750
  • Deadline: October 16-20, 2023 (date varies based on discipline)

Paul and Daisy Soros

  • Website
  • Fields: Unrestricted
  • Eligibility: Prospective and current (first or second year) graduate students; immigrants and the children of immigrants age 30 or younger
  • Award: 1 or 2 years of support; $25,000/year stipend, 50% of tuition and fees up to $20,000 per year
  • Number of Awards: 30
  • Deadline: 10/26/2023

How to Create a Winning Fellowship Application

You can’t throw together an excellent fellowship application in a weekend. They take a great deal of time and effort to conceive, write, re-write, and improve with feedback. Below are the steps you must follow to submit a potentially winning fellowship application.

1) Find Fellowships that Are a Good Match for You

You will dramatically increase your odds of winning a fellowship if you are selective about which ones you apply to. Don’t waste time applying to fellowship programs that have been cultivated for candidates with characteristics or research interests that you don’t share or for which you are unambiguously unqualified.

2) Read the Fellowship Application Components and Prompts Carefully

It may seem like all fellowship applications are similar, but there are actually overt or subtle differences among them. Most if not all fellowship programs will want to hear about your research or research interests (research statement) and also about you personally (personal statement), but the particular aspects of each that they are looking for may differ. It’s vital to fully answer the specific prompts for each different application. Make it easy for the evaluators to confirm that you have addressed every component of their rubrics, e.g., intellectual merit and broader impacts (for the NSF GRFP), career aspirations, etc.

You may be able to use similar points and even prose across your fellowship applications, but each application statement must be carefully tailored.

Early on, it’s also important to identify the various non-statement components of the fellowship application so you can gather them without rushing. These components may include letters of recommendation, test scores, and transcripts.

You may be required to receive your current university’s permission (nomination) to apply for a fellowship, so you need to be aware of the requirements and deadline for applying for that pre-selection stage.

3) Select and Notify the Writers of Your Letters of Recommendation

Give the writers of your letters of recommendation plenty of notice regarding the fellowship applications you request that they submit to (at least a couple months). It is helpful to share with them a spreadsheet or similar in which you can list all the different applications, their due dates, and submission links for each application season.

Different fellowship applications may require different types of letter writers, so you may need to reach out to faculty members or other mentors who are not your primary research advisors for one application or another.

Give faculty members who have never written you a letter of recommendation in the past an extra-long period of time to prepare the letter and offer to meet with them to discuss your application.

4) Begin Drafting Your Fellowship Application Materials Well in Advance of the Deadline

Once you are finished preparing, it’s time to start writing. Again, writing well in advance of the application deadline is imperative. You need to give yourself time for high-quality research, reflection, and crafting. Finish a draft, walk away from it for a few days or a week, and then come back with fresh eyes. At any stage you may ask for feedback: outline, sketchy draft, full draft, or the I-think-it’s-complete draft.

5) Write for the Proper Audience

As with any piece of writing, it’s vital to write for a certain audience. In the case of fellowship applications, you must understand, possibly by reading between the lines, what the evaluators of the fellowship applications are looking for. This is not to say that you will simply tell them what they want to hear, but rather that you will highlight the specific components of your application that you know they have to or want to see included. You should also use language that the evaluator will understand, which likely does not include obscure jargon.

6) Seek Input from Advisors, Peers, and Past Winners

To create a competitive fellowship application, you need outside eyes and expertise. You can get feedback and tips from:

1. Your Research and/or Academic Advisor(s)

Your undergraduate or graduate advisor is the best person to read your statements and give you feedback from his or her perspective as a career researcher who has advised other fellowship applicants and winners. He or she may even be overseeing the project you have proposed in your application, in which case the feedback will be even more specific and useful. Your advisor is likely also writing you a letter of recommendation, so it’s a great idea to give him or her full awareness of what you’re proposing.

2. Other Research and/or Academic Mentors

You may reach out to other faculty or staff members at your current or past institutions to read and provide feedback on your fellowship application. Your university may even designate a specific faculty or staff member as a mentor for certain fellowship applications. Your current institution may hold workshops and seminars to guide you in your applications, which you should make every effort to attend.

3. Your Peers Applying for Fellowships

Forming a reading group for one or more specific fellowship applications is among the most powerful steps you can do to take your application from ordinary to extraordinary. Your group should be composed of your peers of a similar stage and field who are applying to one or more of the same fellowships. You should agree on deadlines for producing outlines and drafts of your statements and read one another’s work at one or more of the stages to help one another improve the ideas and writing therein.

4. Prior Fellowship Winners

You can learn from the past awardees of the fellowships you are applying to. The first network to tap is your personal one: your friends and (older) peers from your college or graduate school who have previously won the fellowship you are applying to. You can also search for advice from fellowship winners online. Ask these winners to share their tips with you, in particular anything that is unique to that one fellowship. Some past winners may even share their statements with you as a model, but if you do read them be quite careful to avoid even inadvertent plagiarism.

7) Finalize Your Fellowship Application

Once you have incorporated the feedback you receive from your mentors and peers, it’s time to finalize your statements and application. Follow all formatting specifications precisely, and even beyond that format your statements so that they are easy to for the evaluators to read.

Be sure to proofread the final version of your statements carefully. While you can complete this step yourself, it is probably even better to ask a friend or family member who has not yet read your statement to go through it with fresh eyes to catch any grammatical, spelling, or formatting mistakes. You might even be able to use your university’s writing center for this step.

Again, don’t wait to the last minute to load your application materials into the application portal. Do this a couple of days in advance of the deadline so you can be sure you have prepared all the materials properly. Finally, you’re ready to submit!

The main advice in this section is to give your application plenty of time and careful attention and to ask for feedback from anyone willing to give it to you!

How to Be an Excellent Fellowship Applicant

This last subject is arguably the most important one of this entire article. Submitting a large number of marvelously written fellowship applications will not propel a weak applicant to success. That is to say, prior to and concurrently with searching out and applying for fellowships, you should also take steps to increase your strength as an applicant.

Of course, fellowships vary in what they look for in a candidate. But there are commonalities:

  • Research experience with demonstrated results and/or deliverables (e.g., papers, posters, presentations, patents)
  • High grades and test scores
  • Strong and detailed letters of recommendation
  • Community service
  • Stand-out experiences
  • Career commitment to research, teaching, service, etc. (whatever is in line with the ideals of the fellowship program)

It’s a great idea to keep track of accomplishment or activity you participate in throughout your college years and beyond with a few annotations about your contributions to draw upon when preparing fellowship applications.

At the end of the day, what makes you an excellent fellowship applicant has a great deal of overlap with what makes you an excellent undergraduate or graduate student or postdoc, effective researcher, and personable individual. Effort you put toward making yourself a stronger fellowship applicant will benefit many other areas of your life as well.

How Fellows Should Prepare for Tax Time at the Start of the Academic Year

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Most Americans don’t like to give any thought to their taxes between when their tax returns are due in mid-April and when their income forms arrive at the end of January. (Scratch that: they don’t want to think about tax anytime outside of the two weeks in early April when they scramble to assemble their returns!) The exception is when they start a new job and are asked to set up their income tax withholding by filing a W-4.

fellowship tax September

A version of this post first appeared on GradHacker.

Graduate students and postdocs – lucky us – have extra opportunities to consider tax withholding, namely every time we change funding from a compensatory source to a non-compensatory source or vice versa. Compensatory funding for your stipend comes from your job as a research, teaching, or graduate assistant. Non-compensatory funding for your stipend comes from fellowships and training grants that are technically awards, not payment for work. (If that distinction makes little sense to you, you’re not alone!) Similarly, postdoc salaries can come in compensatory and non-compensatory versions as well.

As the vocabulary that universities use for these types of funding varies somewhat, here’s how you can definitively determine which type you receive: Compensatory pay is reported at tax time on a W-2. The broadest statement that can be made about non-compensatory pay is that it isn’t reported on a W-2. Universities have different methods for reporting this pay, which include: a 1098-T in Box 5, a 1099-MISC in Box 3, a 1042-S (for international trainees), a courtesy letter, and not at all.

When it comes to tax withholding, compensatory pay is handled by universities the same way employee pay is handled by employers: The trainee files a W-4, which calculates the fraction of each paycheck that will be sent to the IRS throughout the year. Each spring, the taxpayer files a tax return that delineates her exact amount of tax due, and any excess money withheld is refunded or any additional tax due is paid. That system is relatively easy to grasp because it’s the same as what all employees in the US experience.

Fellows (by which I mean trainees whose stipends/salaries are non-compensatory) usually have a different experience with respect to tax withholding, which is the focus of this post.

A small number of universities allow fellows to set up tax withholding using a W-4, just like trainees who receive compensatory pay. If you are a fellow at one of these universities, file your W-4 and join the rest of the country in putting taxes out of your mind until next spring.

However, the large majority of universities do not handle any tax withholding on behalf of their fellows. This does not necessarily exempt those fellows from sending tax payments to the IRS throughout the year; by default, the IRS expects to receive regular payments from each taxpayer. Instead, fellows must engage with the 1040-ES and estimated tax payments, which are more typically used by the self-employed. (But: graduate students are not self-employed!) This omission of services on the part of the universities can be especially challenging for first-year graduate students on training grants or receiving fellowships, who not only may be unfamiliar with the quirks of non-compensatory pay but also the US tax system at large, especially if they have never been a full-time employee.

Further reading: The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients

Fortunately, there are only a few simple steps that fellows need to take at the start of the academic year to prepare for their tax due next April:

1) Use Form 1040-ES to estimate the amount of additional tax you will pay for 2018.

Form 1040-ES is a one-page form (page 8) that assists you in making a high-level estimation of the amount of tax you will owe for this year. (If you want even more information, check out Publication 505.)

You will enter your expected adjusted gross income for 2018 in line 1. If your grad student stipend or postdoc salary is your only income, simply multiply the income on your paycheck by the number of paychecks you expect to receive in 2018. If you have a side income or were otherwise employed prior to starting your fellowship/training grant, add in that income as well.

The worksheet will then walk you through a truncated version of the calculations you will make on your tax return: subtracting your deduction (standard or itemized), calculating your tax due, and factoring in your credits and self-employment tax (from your side income, possibly).

In the end, you will have three relevant numbers: the estimated amount of tax you will owe for 2018 (line 11c), the amount you have to pay throughout 2018 to avoid being penalized (line 12c), and the amount of withholding expected in 2018 (line 13) (for instance, from your job or compensatory pay prior to your switch to non-compensatory pay).

2) Determine whether you are required to make quarterly estimated tax payments, and do so if you are.

If for 2018 you expect to have more tax withheld than the amount required to avoid a penalty, once again you can forget about taxes until next spring.

If for 2018 you will owe at least $1,000 in additional tax, you are required to make quarterly estimated tax payments. (Exception: If your withholding in 2018 is greater than the smaller of 90% of your 2018 tax due or 100% of your 2017 tax due if your 2017 tax return covered 12 months. See Figure 2-A of Publication 505.) You will send in to the IRS one-quarter of your additional tax due (line 15) by September 17, 2018 (for the period of June to August), January 15, 2019, April 15, 2019, and June 15, 2019. You can pay by mail using the vouchers in Form 1040-ES or online at www.IRS.gov/payments.

If in 2018 you will owe less than $1,000 in additional tax, you are not required to make quarterly estimated tax payment, but you will owe a lump sum at tax time.

3) Set up a system of self-withholding to prepare for your tax due quarterly or yearly.

Whether you are required to pay quarterly estimated tax or a lump sum at tax time, the best practice to handle those payments is to prepare for them with each paycheck. Basically, you should simulate your own personal tax withholding system to avoid being forced to come up with a large sum quarterly or yearly, which can be a shock to your budget or cash flow.

Divide your tax due, whether quarterly or yearly, by the number of paychecks you’ll receive in the period it covers. Transfer that amount of money each time you are paid to a dedicated savings account for tax payments. Then, when you pay your quarterly or yearly tax, draw your tax due from the “withholdings” you’ve created in that savings account. (You can also leave this money mixed in with other cash in your checking or savings accounts, but be sure to keep careful track of the amount you have earmarked for taxes so you don’t dip into it for other purposes.)

For the time that you receive non-compensatory pay, you’ll have to stay on top of making your quarterly estimated tax payments or verifying that you are not required to make them. First-year graduate students in particular should redo Form 1040-ES in January for their 2019 income, because while receiving non-compensatory pay for only the fall semester might not meet the requirement for paying quarterly estimated tax, receiving it for the entire calendar year probably will.

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Why You Should Apply for Fellowships Even If You’re Fully Funded

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PhD students are funded by a variety of sources: research assistantships, teaching assistantships, graduate assistantships, training grants, and fellowships. It’s typical to be funded by two or more of these difference sources over the course of your PhD, and the funding source can change year-to-year or even semester-to-semester. While the differences among these funding sources are sometimes subtle, one stands apart from the others: Being funded by a fellowship, particularly a nationally recognized one, is in many ways superior to other forms of funding.

Last week, there was a very interesting conversation on The Grad Cafe about the various ways PhD students are funded. Ultimately, the original poster asked: “Why are fellowships so highly sought after? I am assured full funding (around $30,000) at every school I’m looking at. As someone who isn’t even in grad school yet, is this something I should be concerning myself with?”

I believe every prospective and graduate student should apply for at least one fellowship per year (assuming you are eligible for any). I recently compiled a list of nine portable, broad, lucrative fellowships that prospective PhD students can apply to. Many on that list plus more fund 1st- or 2nd-year PhD students, and there are fresh funding opportunities for PhD candidates with a clear research focus or who are nearing the ends of their dissertations.

Further reading: How to Find, Apply for, and Win a Fellowship During Your PhD or Postdoc

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Why Fellowships Are a Superior Funding Source

At the graduate level, fellowship funding is usually preferable to assistantship or training grant funding.

1) You Don’t Have to Work

This point may seem unclear until you understand the definition of “work” being used. Assistantships are a part-time job and typically require the assistant to work 20 hours/week. Fellowships are a type of award, which means that they are not tied to a specific work requirement. Fellows are still required to make progress toward completing their degrees, which will of course involve classwork in the early years and research throughout the PhD. But students who receive their full stipends from fellowships are excused from doing an assistantship.

The advantage of being paid by a fellowship rather than an assistantship is more pronounced in some department than others.

The ideal situation for a PhD student, and what a fellowship provides, is the ability to put 100% of your effort toward achieving your professional goals (mostly working on your dissertation).

Teaching assistantships confer extra duties that take away from your available time for dissertation work. (Gaining teaching experience may be an additional professional goal, in which case some types of teaching assistantships may be beneficial to you.)

Research assistantships are a mixed bag. In some fields, such as STEM fields, research assistants spend all their time conducting research that will become part of their dissertations (the topic of which is guided by the projects/funding available in the advisor’s lab). In other fields, the research that a research assistant conducts will not become part of his dissertation, so again that is time taken away from dissertation work.

Basically, for teaching and non-dissertation research assistantships, you have to work on your dissertation above your 20 hr/week job, while fellowships and dissertation research assistantships allow you to devote your full working time to your dissertation.

2) They Often Pay More

Most external fellowships provide a specified amount of money for your stipend plus money to go toward your tuition and fees (either to pay them fully or up to a certain amount). For example, the stipend specified by the National Science Foundation Graduate Research Fellowship Program is $34,000/year, by the National Defense Science and Engineering Graduate Fellowship is $102,000/3 years, and by the Department of Energy Computational Science Graduate Fellowship is $36,000/year.

The stipend provided by an external fellowship is usually higher than the stipend you would have received from an assistantship or training grant. Even if the fellowship stipend is lower, some departments will supplement the fellowship stipend up to or above the departmental base stipend. It’s unusual, though not unheard of, for a fellow to receive a lower stipend than his classmates funded by assistantships or training grants.

Further browsing: PhD Stipends

An external fellowship also confers rare negotiating power to you. Negotiation is likely to be most effective when you are a prospective graduate student with multiple offers to (tactfully) play off one another. The fellowship stipend might be supplemented by a department every year, or the department might pay a one-time bonus to the fellow. If you receive a fellowship while already enrolled in a PhD program, you can also ask for a supplement or bonus. (Be sure to ask other fellows in your department if any extra money was conferred to them.) Something else you can negotiate for is additional years of guaranteed funding after the fellowship ends.

3) Fellowships Give You More Autonomy

Because fellowship money is separate from your advisor’s grants, it can in many cases increase the control you have over your own research pursuits. It may allow you to shift the focus of your dissertation away from the main thrust of your advisor’s research, facilitate a collaboration with another group, or add a side project to your dissertation that isn’t aligned with your advisor’s grants.

4) Fellowship Sometimes Pay Above Your Stipend

In addition to paying your stipend and (part of your) tuition and fees, some external fellowships award you additional money for conference travel or professional development.

A Former Downside

Up through 2019, fellowship funding had one major downside: It was not eligible to be contributed to an Individual Retirement Arrangement (IRA) (unless it was reported on a Form W-2, which was rare). However, starting in 2020, fellowship income is eligible to be contributed to an IRA, eliminating this one major downside.

Further listening: Fellowship Income Is Now Eligible to Be Contributed to an IRA!

Why You Should Apply for at Least One Fellowship (Even If You Don’t Win)

While the best result of applying for a fellowship is that you’ll actually win it, there are positive side effects even if you don’t.

1) Shows Initiative/Effort

Applying for fellowships when you’re not required to (like you have a guarantee or reasonable expectation of funding) shows you are willing to take initiative to further your training and career. You are trying to provide for yourself instead of depending on your department or your advisor. Even if you are not successful, this is an admirable quality; your advisor or potential advisors will probably be impressed at your effort.

2) Good Practice

Applying for fellowships somewhat resembles applying for grants, although usually abbreviated. If you are going to be a career researcher, you will have to develop the skill of successfully pitching yourself and your ideas to funding agencies. Applying for fellowships and predoctoral grants is good practice for the larger grants you’ll apply for later.

The Most Compelling Reason to Apply for Fellowships

The most compelling advantage to winning a nationally recognized fellowship is not its superiority as a funding source or how the process benefits you or your advisor, but rather its role as a CV-booster. Winning a prestigious fellowship early on in your career sets you up well to win larger and more lucrative awards later on. While it is of course possible to win fellowships and grants later in your career without winning one in graduate school, it is advantageous to have been favorably evaluated in the past by another agency. Winning a fellowship in graduate school is an early step in creating a track record of obtaining funding for your research, which is something hiring and tenure committees look for.

Prospective graduate students should apply for at least one large, multi-year fellowship (assuming eligibility) so you, if nothing else, can tell the PIs you’re interviewing with that you did it. If you’re in a STEM field, the NSF GRFP is likely to be your first stop. Once you’re enrolled in graduate school, you should consult with your advisor about which fellowships to apply for, at apply to at least one more in your first and second years and any later years in which you are eligible.

Fellowships

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Frequently, PhD students will be supported for one or more years of grad school by training grants or fellowships. Training grants are given to departments to support incoming students while they are engaged with taking classes and doing rotations before committing to an advisor. Fellowships may be given by the university or an outside funding source and typically carry some prestige as well as possibly a higher pay rate. Both fellowships and training grants are typically considered non-compensatory pay because there is “no work requirement.”

Further reading: Stop Making Excuses and Start Applying for Graduate Grants, Scholarships, and Fellowships

Finding Fellowships

Before you enter your program, you should talk with faculty members, administrators, and older students to learn what type of funding you have been offered for the first and subsequent years and what additional funding you might apply for. Fellowship applications are often due in the fall for funding beginning in the next school year, so you may need to start your applications soon after arriving on campus.

In addition to university-based fellowship opportunities, there are many national-level field-specific fellowships available to students at different stages of their degrees that are catalogued in fellowship databases.

What if I have more than one fellowship?

It is not uncommon for students to receive more than one fellowship that provide stipends. In those cases, the funding agencies typically coordinate a schedule that will allow the student to use only one fellowship at a time and spread the funding out over more of the student’s tenure in grad school. These qualified students may have fellowship funding from the start of grad school to the end.

If I win a fellowship, what does my department give me?

If you receive a fellowship that alleviates your university of providing your stipend, particularly if it is prestigious and for multiple years, ask your department if they provide a bonus or supplemental pay to students who win that fellowship. If you are receive the fellowship during your application process, find out which schools would offer a bonus or supplemental pay and consider letting your top choice know what your other offers are. This is possibly the only opportunity a grad student has to negotiate compensation.

What happens when my fellowship ends?

If you receive a fellowship that provides a stipend that is higher than the base stipend of your department, be cognizant that your stipend may decrease significantly when your fellowship ends. Be proactive in using your excess income for those years to beef up savings or pay down debt instead of inflating your lifestyle.