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How to Find and Apply for Fellowships (with ProFellow Founder Dr. Vicki Johnson)

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In this episode, Emily interviews fellowship expert Dr. Vicki Johnson, the founder and director of ProFellow. After completing multiple professional fellowships and her PhD, Vicki decided to help other fellowship seekers do the same by creating the ProFellow database, which now contains more than 1,200 professional and academic fellowships. Vicki relays the best way to find and apply for fellowships and gives excellent advice for making your fellowship application stand out. Winning a fellowship is the best way to increase your stipend or salary as a graduate student or postdoc, and Vicki shares from her experience some of the other career benefits that fellowships bring.

Links Mentioned in the Episode

fellowship application

Teaser

00:00 Vicki: At the end of the day, these organizations that are outside of the university are funding fellowships as a way to further their social impact mission. So make sure you understand what is the mission of the fellowship organization, why are they funding your research or would want to. Make sure you tie your story to their mission, how you’re going to further their mission. That will make you a more competitive candidate.

Introduction

00:25 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season four, episode three and today my guest is Dr. Vicki Johnson, the founder and director of ProFellow, the leading online resource for academic and professional fellowships. Vicki herself did four professional fellowships in addition to her funded PhD. Vicki and I discussed the best way to find and apply for academic fellowships, and Vicki gives excellent advice on how to boost your applications’ chances of success. Without further ado, here’s my interview with Dr. Vicki Johnson.

Will You Please Introduce Yourself Further?

01:06 Emily: Welcome to the podcast. Today, I am joined by Dr. Vicki Johnson, who’s the founder and director of ProFellow, which is a fantastic fellowships database and just amazing resource for graduate students and postdocs and anyone pursuing fellowships kind of in any way. Vicki and I are going to be talking today about everything fellowships. How do you find them? How do you apply for them? How do you win them? Because she is really the premier expert on this topic in our space. So Vicki, thank you so much for joining us today.

01:41 Vicki: Thank you for having me!

01:42 Emily: Can you tell us just a couple words about your background? You know, you have a PhD and how you got started with ProFellow.

01:50 Vicki: Sure. I actually started out in the fellowship world as a professional. I did four professional fellowships in the field of policy and I did some in the U.S. and some abroad. As I was progressing through my career, I did my Masters and then ultimately did my PhD, which was actually just a serendipitous thing that I did while I was on a professional fellowship. Then I had a major career transition about five years ago and decided to teach other people about how to find and win fellowships through ProFellow. And now I’m fully focused on that as my thing. I love fellowships, and I’m excited to tell people more about them.

How Do You Define “Fellowship”?

02:27 Emily: Yeah, it sounds like you have a ton of personal experience as well as your extensive professional experience. So yeah, let’s get started with that– with a pretty basic definition. What is a fellowship? Because that term can mean a lot of different things depending on who you’re talking to. So how do you define it?

02:45 Vicki: So for the purpose of our website, we sort of decided that the definition would be “short-term funded opportunities to do something exceptional.” So there’s a lot of funding opportunities, professional development opportunities, graduate school funding opportunities that aren’t necessarily called fellowship and title, but they do provide funding. They are time-limited, so they’re usually anywhere from a couple of weeks to a couple of years in length. And they provide you the resources and the network that you typically wouldn’t get in either a job or even just the regular scholarship. So it’s a pretty broad definition. People typically have heard of postdoctoral fellowships or they’ve heard of scholarships and things. But it’s a really very broad definition. So there’s quite a few professionals fellowships and also a whole other world of academic fellowships.

03:36 Emily: Yeah. And so I think today we’re going to be focused mostly on those academic fellowships, the ones that will pay your stipend, maybe pay some tuition and fees, pay your salary if you’re at the postdoc level. But just so people are aware, your site covers much more than that. And in fact, I did a policy fellowship myself after I finished my PhD. It was the, the Mirzayan Fellowship in DC. And that’s something that I wrote about for your site because that fellowship is one among the many others that you cover. But we will be focusing today on those academic fellowships. But just for anyone who’s thinking about another fellowship opportunity, still go back to ProFellow because it’s going to be an amazing resources for you as well. So with these academic fellowships, how do you go about finding them? We’ve all heard probably of the standout one in each of our fields, whatever that is, but there are going to be a whole lot more, too. So how do we go about finding these fellowships?

How to Use ProFellow to Find Fellowships

04:26 Vicki: Well here I’m going to do a big plug for the site profellow.com because we have an enormous database of fellowships at both the professional and academic level. So if you sign up for free to use ProFellow, you can create an account and come in and search our huge database. And within it there are filters. So you can either select fellowships for doctoral study, graduate study, which would include masters programs and postdoctoral research in addition to professional, even summer fellowships for students. You can narrow it down that way and then you can also narrow them down by discipline, your citizenship, years of work experience. I would also say use certain keywords. So let’s say you’re working in conservation. You can use that as a keyword in the database. But for the most part, I tell people to keep their search filters quite broad because there are a lot of fellowships that are multidisciplinary in nature.

05:18 Vicki: So even if it’s not specifically a conservation fellowship, there could be a whole range of fellowships that you can do a conservation related research project, or dissertation research or whatever, with the fellowship because it might be a broader social sciences fellowship or STEM fellowship. So keep your search broad and take the time to look through. We purposely made the listings so that they’re really brief and easy to skim and you can bookmark opportunities. And then you can also from the listing go to the website to learn more. And honestly, I only say this because it’s true. We are a better place to look for fellowships than, say, on Google. If you Google these things, you’ll come up with all sorts of stuff that may or may not be relevant to what you’re looking for. And it’s very difficult to find fellowships on Google or even just through word of mouth. So, use the website. It’s free, and it’s a great way to also find out about new opportunities that are coming up every year.

How Do You Maintain the ProFellow Database?

06:12 Emily: Yeah, thank you so much for that. I’ve been referring to ProFellow for many years as a key database for all of this, and it’s exciting to hear what all you do. I’m actually wondering how you find all these fellowships. Are you well-known enough that these new programs just e-mail you when they have something new coming up, or how do you maintain this database?

06:31 Vicki: Oh, good question. Well, back in the day, nobody knew who we were. But now that we’ve been around since 2011, we have a brand name in the fellowship industry. And honestly, some of the larger categories of fellowships– like, let’s say you’re Googling journalism fellowships or mid-career fellowships or postdoctoral fellowships– ProFellow will rank some of our articles at the top of the list. There are other keywords that we’re still fighting for to get to the top of the list. But if you’re listening to this and you’ve heard of us, you’ll see that. And we’re also very active in the fellowship industry. I just came back from a conference in DC, the Impact Fellowships Summit. So, our name is growing. We’re still a bit skewed toward, U.S. Citizens, U.S. Students, or people coming to the U.S. in terms of what funding is out there. But we are also growing globally. So we are getting more and more fellowships for non-U.S. citizens, international students, or people from other countries going to non-U.S. countries. So, it’s growing. So, there are more and more things. The more you share us with your friends and your colleagues and your professors, the more well-known we will be and even more fellowships we will list.

Applying for Academic Fellowships

07:40 Emily: Yeah, wonderful. Okay, so we have a grad student or a postdoc or an aspiring one of those categories who wants to win a fellowship. What’s the application process like for these academic fellowships?

07:54 Vicki: Yes, well, if you have never applied to a fellowship before, you’ll see that actually it can be similar to applying to graduate school. Usually, there’s a personal statement, recommendation letters, short answers that you have to respond to. In many cases, for the academic or research-related fellowships, you might even have to put in a research proposal. That could be anything from a really brief research proposal to something that’s really long and intense. So, it’s different for every fellowship. I say, get started early. The first thing you should identify is: what do you need to include in the application? I think if you’re in graduate school, you’ll be used to this process of writing a personal statement and talking about your goals, what you want to achieve in your research, so that experience will help you as you pursue the fellowships.

08:42 Emily: So I liked that you drew parallels between the process of applying to graduate school and the process of applying for fellowships. In fact, sometimes even the timing of those things can come together. Right? Do you find that fall is a heavy fellowship season or is it kind of spread out around the year?

08:58 Vicki: Oh yeah, that’s a very good question. Yeah, typically it’s just like the graduate school process where it’s based on the academic year. So you do want to look for fellowships as early as possible. Deadlines tend to fall anywhere between October and January. That’s kind of a typical, what we call, fellowship season. And so if you’re looking for funding, it’s often not very easy to get a fellowship that’s going to fund your next semester right away or even in a few weeks or a few months. Usually, you’re looking a year out. So that’s why, let’s say you’re entering your coming year– your academic year. The fellowships that you apply to this fall typically will fund your following academic year. So yes, keep that in mind. It’s an important kind of timeline that people should be aware of when they’re looking for fellowships.

How to Get Ahead of Fellowship Deadlines

09:42 Emily: Yeah. This is definitely something you need to plan ahead for. Can you tell me a little bit more about, not necessarily the timeline about the fellowship applications cause presumably they just have a due date, but all the various components that could go into an application. Different kinds of essays, letters, just stuff that you need to be working on. Like what do you need work on well in advance of these deadlines?

10:03 Vicki: Well, I think it’s really important if you’re looking for funding for academic research, say your dissertation, to do field work and that sort of thing. A lot of times what the fellowship organizations want to know is they want to know that you’re going to be successful. So when they fund you, they want to know that your project can be successfully completed in the time period of the fellowship with the resources available with the funding available.

10:25 Vicki: So if you’re applying for, say, like a summer fellowship that is only three months in length. That’s not enough time to do your entire dissertation. You’re probably just doing one element of it. So make sure that your research proposal, if that’s part of your application, really reflects what the fellowship is offering and what can be accomplished in that. Because feasibility is very important. It doesn’t matter how great your ideas is; if it’s not feasible, it won’t make it to the next stage. And in the personal statement too, they want to see more about why you’re passionate about your research topic. What are your longterm goals? Often people forget to put in what their career goals are or what they’re going to do after the fellowship. That’s really important. Make sure to include those because at the end of the day, these organizations that are outside of the university are funding fellowships as a way to further their social impact mission. So make sure you understand what is the mission of the fellowship organization, why are they funding your research or would want to. Make sure you tie your story to their mission, how you’re going to further their mission. That will make you a more competitive candidate. So those are, I would say, the main things to include.

Commercial

11:29 Emily: Emily here for a brief interlude. Through my business, I provide seminars and webinars on personal finance for graduate students, postdocs, and other early career PhDs for universities, institutes and conferences, associations, et cetera. I offer seminars that cover a wide range of personal finance topics and others that take a deep dive into the financial topics that matter most to PhDs like taxes, investing, career transitions, and frugality. If you are interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking that’s p f f o r p h d s.com/speaking. Now back to the interview.

More Advice for Fellowship Applicants

12:18 Emily: Yeah, so it sounds like there are some of these elements, you know, essays that you can reuse much of for several different applications that you might have. But some things are definitely going to have to be tailored to the specific organization.

12:30 Vicki: Absolutely. My mantra is that the amount of effort that you put into your application directly correlates with your likelihood of success. So, I know people don’t want to hear that, “Aw, man, I have to put a lot of time into my application,” because on top of it you’re studying and you’re working, you’re doing other things. But it’s true that when you’re focusing on an application, start it as early as possible because then you can break out times on your calendar to be able to focus just on the application and also make sure to tie in your professors, your mentors. They’ve been doing this a long time. Many of them have won multiple fellowships, multiple grants and funding awards. Don’t do this in a little silo by yourself. Make sure you tell your advisors, your professors that you’re applying for the fellowships because they could have some great insights. They may even be connected to the fellowship in some way you might not be aware of. So, be sure to reach out for advice from those groups, too.

How to Stand Out as a Fellowship Applicant

13:29 Emily: Yeah, we’re definitely getting into some good advice here for fellowship applicants. These fellowships presumably get hundreds, thousands, tens of thousands of applications. What’s going to really make a candidate stand out and make a fellowship application look very, very strong?

13:48 Vicki: Yeah. The two main things, especially with the academic research, if you are applying to a fellowship that is being funded by a foundation, a nonprofit government agency, NGO, whatever that is, make sure that you understand the mission of the organization. I think I mentioned this already, but a lot of people sort of skip over this part. They are so wrapped up in explaining their research and why they want to do it that they don’t really tie why their research aligns with the mission of the organization. So it’s very, very, very important that you touch on that mission. They may not ask you how you feel about their mission. They may not ask you how it ties to their mission. But when you think about the other group, the other person–the investors, as I like to call it–they’re investing in you. Make sure you make a really clear reason as to why they should invest in you because they have a purpose for the fellowship and you have a purpose for your research and you’ve got to make sure they tie together.

14:47 Emily: Yeah. Excellent. Any other advice for making an outstanding fellowship application, but let’s say also just an outstanding fellowship applicant? What can you do in your life that will go on your CV or that people will be able to write about in your letters that will help you stand out?

Fellowships: More than Just the Fellowship

15:05 Vicki: You know, I think some people get a little bit intimidated by the fellowship process. Like you said, there’s hundreds, thousands of applications and it can be really disappointing to get a rejection letter from a fellowship that you worked really hard on the application on. But just keep in mind that the effort that you put in, your professors and your supervisors are watching as you do this. And so even if you’re rejected, I’m telling you, there’s something extra that you get. I don’t know what the right word is, that will help you as you go further in your career. So it’s not all for not if you don’t get into the fellowship. But also, if you do get into a fellowship, make sure to take advantage of the wider resources that the fellowship offers.

15:49 Vicki: There’s usually an alumni network. They’re connected to high-level organizations and leaders in your field, both in the U.S. And globally. Take full advantage of every opportunity that the fellowship provides beyond just the funding that they’re going to give you. Because we all know that when it comes to career tracks that, these days to get a job, you have to be in the know. You have to know somebody, you have to be an influencer, you have to have personal connections. And these are things that are very valuable that you can get out of the fellowship. But also, these personal connections that you make are also very valuable when you’re applying to fellowships, too. So as you’re applying, reach out to alumni, reach out to professors and mentors, get as much advice as you can. All of this, little bit incrementally, adds to your success long-term.

How Often Should I Apply for Fellowships?

16:37 Emily: Yeah, I’m really glad you brought up the other benefits of winning a fellowship aside from the funding itself. So I had a friend in graduate school who was a Hertz Fellow. I was blown away by the number of networking events and opportunities to meet potential employers that that fellowship provided. It was truly outstanding, and I don’t know that there are that many others that go to that degree. But certainly as you said, there are alumni networks that you can be connected to. Really, it is another way of networking. A very, very good, strong networking connection to have won a fellowship. One other thing I wanted to ask you about: another guest that I just had on who was a fellowship applicant said something along the lines of, “it’s sort of a numbers game.” You just need to apply to a lot of stuff and hopefully, here and there you’ll win something. But really, as you said, each fellowship application takes a good amount of time dedicated to it. Would you say that people should be applying to a few fellowships every year? Not necessarily like full, “it’s going to pay everything” fellowships, but just some kind of award that they could go up for.

17:42 Vicki: To be honest, I’m not really in the mind frame of the numbers game. I’ve heard people say that. I’ve heard multi-award winners say that. As as I said, I have won multiple fellowships, but for each of them I was sort of applying for them one at a time. When you’re applying to graduate school or looking for graduate funding, often you do have to apply for a few at a time in the hopes that you get one of them. But I don’t know necessarily that it’s a numbers game where you just throw out a million applications and hope that one sticks, because I do think that approach could also distract you a little bit from really putting in the focus that you need to create a strong application. I would say just make sure that you’re a good fit for the programs that you’re applying to.

18:23 Vicki: If it really is a stretch, is your research actually furthering the mission of the organization? If it’s really a stretch, it might not really be worth applying to. Whereas if you find two or three fellowships that you think you’d be a really good candidate for, go for all three, because it will be worthwhile. And I should also say people should look into summer fellowships too, which are just kind of brief summertime fellowships that are specifically for students. Some of them are professional in nature. Some of them are for academic research as well. But even those little summer fellowships give you those professional networks and experiences that you can’t get otherwise and they’re very, very good for your post-graduation career goals.

Final Advice for Fellowship Applicants: Be Yourself

19:06 Emily: Yeah. Thank you for your insight on that. I’m going to ask you a little more about ProFellow in a moment, but just before we get there, any final words of advice for fellowship applicants?

19:17 Vicki: Oh, just be yourself, too. I think people worry too much about telling the organization what they want to hear. And I do teach people about the social psychology of really understanding the mission and making sure that you link your work to that. But at the same time, to be your authentic self is really valuable. There are people reading these applications. They’re not robots. They’re people. So, tell your story, your authentic story, and really be yourself. And if you get thrown a hard question, answer it as honestly as you can. If it was meant to be, it will be.

Additional Resources at ProFellow

19:51 Emily: Okay. So tell us a little bit more about ProFellow. You’ve talked about the database a little bit already, but I know you have a lot more stuff going on aside from just, this is where we can search for fellowships.

20:00 Vicki: Sure. At profellow.com, we do have this huge database of funding opportunities that you can search. We also do articles featuring fellows and ask them about their fellowship experience and their application tips. So it’s a great place to hear what fellowship alumni say about how they made their application stand out, what they did to get above the hundreds of thousands of applicants. We also do listicles, we do articles. Specifically, “10 fellowships in policy,” “25 dissertation fellowships.” So we have a lot of resources that help you find the fellowships and get the tips. We also have workshops, usually on a monthly basis, on everything from creating a great personal statement to creating an exceptional research proposal.

20:45 Vicki: So if you’re on our mailing list, you’ll be alerted to those things as well. And actually, next week and two weeks from now I’m doing a Fulbright applicant mastermind for people that are applying for the international Fulbright awards. So that’s something that if you’re considering as an enrolled student for either your field work or just to have an international experience, a Fulbright is something you can consider. But yeah, we have all sorts of stuff. We even have ProFellow academy, which is another platform for free advising. So you can ask questions, connect with fellowship alumni, have office hours. So yeah, we’re just chockfull of resources. Most of it’s free. So, sign up, get on our mailing list and then you will have access and also get alerts about new fellowship opportunities.

How to Connect with ProFellow

21:26 Emily: Yeah, that sounds amazing. I’m actually trying to think, “oh, is there any fellowship that I could apply for? Does that fit in my life right now?” One of those professional fellowships that you mentioned. So profellow.com, is that the best place to go? Or are you on social? Any other contact information you want to share?

21:41 Vicki: Oh, yes. You’ll find us also on Facebook, Twitter, LinkedIn. But really just go to profellow.com. That’s the place to be. Sign up right on the homepage and that’ll get you right into the database. You can also search our site for all the other great stuff. Be on the lookout for our biweekly newsletter, ProFellow Insider.

22:00 Emily: Yeah. Thank you so much, Vicki for joining me on the podcast today and sharing your expertise with us.

22:06 Vicki: Thank you. Thank you for having me.

Outtro

22:08 Emily: Listeners, thank you so much for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes, a form to volunteer to be interviewed, and a way to join the mailing list. I’d love for you to check it out and get more involved. If you want to support the show and my business, please go to pfforphds.com/helpout. There are plenty of ways to do so without laying out any of your own money. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it doesn’t hurt. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC.

This Grad Student Defrayed His Housing Costs By Renting Rooms to His Peers

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On today’s episode, Emily interviews Dr. Matt Hotze, an administrative director at Rice University and co-host of the Helium podcast. When Matt moved to Durham, NC for his PhD, he immediately purchased a 3-bedroom house and rented the two extra rooms to his labmates. The rent Matt collected from his two housemates covered nearly all of his mortgage payments during his years in grad school, though he had some financial bumps in the road as well relating to house repairs and his dual relationship with his housemates. Ultimately, his decision to sell the property also hinged on his personal relationship with his tenants. Matt shares the overall effect this investment had on his finances and his three key pieces of advice for another early-career PhD considering this route.

Links Mentioned in the Show

PhD landlord

Would You Please Tell Us More About Yourself?

Matt has a PhD in environmental engineering. His advisor moved from Rice University to Duke University near the start of his PhD. He purchased a home in Durham when he moved there in 2005. After he finished his PhD in 2008, he did a postdoc in France and then another postdoc at Carnegie Mellon. Subsequently, he had a career in publishing with the American Chemical Society, serving as the managing editor for four journals, where he learned the business side of science. Currently, he works at an engineering research center at Rice with 80% of his time, and the other 20% of his time is dedicated to the Helium Podcast.

How Were You Able to Purchase a Home During Grad School?

It is no mean feat to buy a home during grad school!

Further reading: Purchasing a Home as a Graduate Student with Fellowship Income

First, Matt was “blessed” to not have any debt from undergraduate degree.

Second, when he started grad school in Houston, lived with his parents for most of his first year and banked much of the stipend. Living with his parents in the suburbs was cheaper because the distance from home to campus impeded going out and spending on entertainment. His motivation to save money was due to his upbringing; since he was able to save, why not do so? He expected there to be some use for it eventually, though he didn’t have specific plans to buy a home when he started. Saving the money wasn’t a big sacrifice as living with his parents was comfortable.

Third, in 2005-2006 the houses in Durham were not that expensive. This was after the dot com bubble burst in early 2000s and the housing crisis hadn’t hit yet. Matt hadn’t necessarily planned to buy, but he saw that the nice, recently built apartments were rather expensive to rent.

Though Matt had enough money for a 20% down payment, he still needed his parents to co-sign his mortgage because his income alone wasn’t sufficient to support the mortgage payments. He bought a modest 3BR home and rented out the other two bedrooms for below market rate. The purchase price for the home was approximately $200,000.

Further listening: How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income

Matt bought the house even before he moved to Durham, so he never rented there. He felt he was on a time clock to own the home for long enough during his PhD to make the transaction costs worthwhile. He decided he would either buy right when he arrived in Durham or he wouldn’t do it at all.

Emily had a similar thought process a few years into grad school when it might have been possible to buy, but since she was already a couple years into grad school she decided against buying due to the time clock.

Matt’s first tenants in Durham were the other grad students in his lab also moving with his advisor, which also influenced his decision to purchase right away.

What Were the Pros of Renting Out Rooms to Peers?

1) Matt had almost zero housing expenses as the rents from the two bedrooms basically covered the mortgage each month.

2) Matt’s house became the gathering spot for his grad school friends, so instead of spending money going out they would drink beer and play board games at home. (Emily had a similarly inexpensive social experience in grad school.)

3) Didn’t have any issues with the great majority of his tenants.

What Were the Cons of Renting Out Rooms to Peers?

1) Once Matt moved on from his PhD, he didn’t know his tenants quite as well. One of his tenants asked to pay his rent late a couple times. It wasn’t possible to handle this completely professionally because of the social ties between him and his tenants. This did end up working out, but it was stressful to handle this, especially from afar. Matt was especially concerned about being fair to all his tenants but not establishing a precedent that it’s OK to pay the rent late. The rental agreement between Matt and his tenants was helpful in this case, not only the legal components but also to set expectations.

2) The home inspector didn’t catch some flashing around the chimney, so a water leak developed soon after the purchase. Matt used some additional cash he had on reserve (~$500) for this repair, so it was a good thing he hadn’t used all his cash on the purchase. Another time, the water heater exploded. Thankfully replacing it didn’t cause an issue because Matt already had cash built up for these kinds of repairs. Emily references the 1% rule: You can expect to pay 1% of the home’s value in maintenance/repairs each year – but that’s only an average! It can be much higher or lower in any given year.

Why Didn’t You Sell When You Left Durham?

When Matt left Durham for his postdoc in France, it was not a difficult decision to keep the property. He still had tenants in place who would take a couple more years to finish their PhDs, and with three rooms rented out the property was now earning money above expenses. One of Matt’s friend-tenants served as the property manager so he didn’t have to hire a professional company.

At the end of grad school, Matt had a good amount of savings built up, and after the postdoc he had even more saved. This really set him up to be financially successful in subsequent stages of life. He lived in Pittsburgh for his second postdoc. When Matt married his wife and combined their finances, he was able to significantly contribute to their nest egg. It was great to not have to worry about (non-mortgage) debt.

All of this financial success came from the germ of financial parental help during college and that first year of grad school. Good financial fortune and bad financial fortune early in life do not guarantee any particular financial outcome, but certainly put momentum behind your finances one way or another.

How Did You Decide When to Sell the House?

When his friends finished their PhDs at Duke, Matt no longer felt able to hold on to the property. He didn’t have the bandwidth at the time while working in an intense postdoc position and applying for faculty positions to figure out how to hire a property management company from afar. Deciding to sell was really a trust issue. If he didn’t trust his tenants through personal relationships, he didn’t want to be a landlord any longer. It’s not always about numbers, sometimes it’s more about your feelings!

Matt ended up selling in 2009, which was pretty bad timing with respect to the national economy. He sold the house for just about the same price that he bought it for. Even without the property appreciating, the financial benefits he experienced through those years made it a good financial decision. Even though he didn’t make any money on the house, he defrayed all his housing costs when he lived there and continued to make money afterwards.

What Advice Would You Give to a Grad Student or Postdoc Who Is Considering Buying a Home and Renting Out Rooms?

1) Use a calculator to figure out whether buying and renting out rooms in a home makes sense financially in terms of the costs you will incur and the rental prices.

2) Are you OK having uncomfortable conversations with your tenants? Someone will inevitably not pay rent or break something or something stupid in the house. This will happen whether you know the renters or not!

3) Are you comfortable making basic repairs on your own? It’s expensive to outsource it all the time! Are you able to talk with vendors and negotiate? This is a needed skill.

4) What’s your gut feeling on owning rather than renting? You’ll make a good decision!

What Is the Helium Podcast?

Christine and Matt co-host the Helium Pocast. They help early-career researchers – senior grad students to early faculty – navigate the transition from grad school into first faculty position, from landing the position to navigating the position to advancing within the position. They bring on interviewees to talk about career transitions. Check them out! New episodes come out every Tuesday.

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

Where to Report Your PhD Trainee Income on Your Tax Return (Tax Year 2024)

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There are two broad categories of PhD trainee income: employee income and awarded income. Employee income is W-2 pay, whereas awarded income is any other regular type of income for a graduate student or postdoc, which might be reported on a Form 1098-T in Box 5, a Form 1099-MISC in Box 3, a Form 1099-NEC in Box 1, a Form 1099-G in Box 6, or a courtesy letter—or not reported at all. For US citizens, permanent residents, and residents for tax purposes (the intended audience for this article), both employee and awarded income are supposed to be reported in the ‘wages’ line on your tax return, i.e., Form 1040 Line 1.

This article was most recently updated on 1/17/2025. It is not tax, legal, or financial advice.

PhD where tax return

Where to Report Employee (i.e., W-2) Income

Employee income comes will be reported on a Form W-2. The terms used for employees at the postdoc level vary quite a lot, but at the graduate student level the positions are usually called assistantships (research, teaching, graduate, etc.).

Your gross yearly employee income will appear in Form W-2 Box 1, and the income tax that has been withheld from you pay will appear in Boxes 2 (federal), 17 (state), and 19 (local).

Form W-2 contains instructions for the employee (p. 7), which state: “Box 1. Enter this amount on the wages line of your tax return.”

The wages line of your tax return is Form 1040 Line 1a, which is labeled: “Total amount from Form(s) W-2, box 1.”

The Form 1040 instructions for Line 1a (p. 23) state: “Enter the total amount from Form(s) W-2, box 1. If a joint return, also include your spouse’s income from Form(s) W-2, box 1.”

Where to Report Awarded Income

Awarded income is not given in exchange for work as an employee, and therefore no W-2 is issued. At the graduate student level, awarded income is usually called scholarships, fellowships, and grants. The titles used for postdocs receiving awarded income vary, but they are not considered employees.

Awarded income will be officially reported to the student on a Form 1098-T in Box 5, on a Form 1099-MISC in Box 3, on a Form 1099-NEC in Box 1, or on a Form 1099-G in Box 6. It also might be unofficially reported on a courtesy letter or not appear on any documentation at all.

Further reading:

Please note that you must calculate the taxable portion of your awarded income for the year; it is not necessarily the same as your stipend/salary. Unlike with a Form W-2, you do not necessarily report exactly the amount that appears on your tax form or courtesy letter. See How to Prepare Your Grad Student Tax Return for more details.

Publication 970 Chapter 1 discusses where to report the taxable portion of scholarships, fellowships, and grants (p. 7):

Form 1040 or 1040-SR. If you file Form 1040 or 1040-SR, include any taxable amount reported to you in box 1 of Form W-2 in the total on line 1a. Include any taxable amount not reported to you in box 1 of Form W-2 on Schedule 1 (Form 1040), line 8r.

The Form 1040 Instructions for Schedule 1 Line 8r (p. 24) state:

Line 8r Scholarship and fellowship grants not reported on Form W-2. Enter the amount of scholarship and fellowship grants not reported on Form W-2. However, if you were a degree candidate, include on line 8r only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 8r.

The Complete Guide to Quarterly Estimated Tax for Fellowship Recipients

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If you’re reading this article, you’ve already done the hard part: You know (or suspect) that you’re supposed to pay quarterly estimated tax on your fellowship using Form 1040-ES. Whether you’re a graduate student, a postdoc, a postbac, or some other kind of fellow or trainee, if you’re not having tax withheld from your income, it’s pretty likely that you have the responsibility of paying quarterly estimated tax. The main obstacle to PhD students and postdocs paying quarterly estimated tax is simply awareness! The process itself is not complicated or difficult, as I’ll show you in this complete guide to quarterly estimated tax for fellows.

complete guide quarterly estimated tax

If you’re still unsure that you owe income tax at all on your fellowship income—or you want to help your peers understand this issue as well—I have plenty of articles and podcast episodes on that topic in particular.

Further reading and listening:

This article is for US citizens, permanent residents, and resident aliens living and working in the US, and I’ve made the assumption that you are not, in addition to being a fellow, a farmer, fisherman, or business owner/self-employed, that you do not have any household employees, and that your adjusted gross income is less than $150,000. (There are additional factors at play for these groups with respect to calculated estimated tax due.)

This post is for educational purposes only and does not constitute tax, legal, or financial advice.

This post was most recently updated on 3/21/2024.

Table of Contents

This article is an overview of how to handle estimated tax as a fellowship recipient. For an in-depth, line-by-line exploration of the Estimated Tax Worksheet in Form 1040-ES that addresses the common scenarios fellowship recipients face, please consider joining my tax workshop. It comprises pre-recorded videos, a spreadsheet, and quarterly live Q&A calls with me.

Click here to learn more about the quarterly estimated tax workshop for fellows.

What Is Estimated Tax?

The IRS expects to receive tax payments from you throughout the year, not just in the spring when you file your tax return.

To that end, employers offer automatic tax withholding to their employees. The employee files Form W-4 with the employer. This form helps the employee perform a high-level calculation about the amount of income tax the employee will owe for the year, which tells the employer approximately how much income tax to withhold from each paycheck. (Non-student employees will also have FICA tax withheld.)

Non-employees are almost never extended the courtesy of automatic income tax withholding by their university/institution/funding agency. (Income tax withholding for fellowship/training grant recipients is offered in rare cases—Duke University is one, at least while I was there—so it is worth inquiring about, but don’t be surprised if the answer is no.) Instead, the onus is on the individual to manually make tax payments.

By the time a person/household files a tax return in the spring of each year, the IRS expects the tax paid throughout the year to be in excess of or only slightly less than the actual amount owed. Approximately 3 in 4 Americans receive a tax refund (the amount of tax paid throughout the year minus the actual amount owed) after filing their tax returns. The rest, presumably, owe some additional tax when they file their tax returns. If the amount of additional tax due (above the amount paid throughout the year) is too high, the IRS will penalize the taxpayer.

To help taxpayers avoid underpaying tax throughout the year and being penalized, the IRS has set up a method of making manual tax payments four times per year: quarterly estimated tax payments. Anyone whose primary income isn’t subject to automatic withholding (e.g., fellowship recipients, self-employed people) or who has significant income in addition to their employee income (e.g., investment income) should look into making quarterly estimated tax payments.

Who Has to Pay Estimated Tax?

In general, you should expect to pay income tax in the year you receive your fellowship unless:

  • Your income is particularly low (e.g., you had an income for only part of the year or your fellowship went toward qualified education expenses instead of your personal living expenses) or
  • Your tax deductions and/or credits are particularly high.

Your tax due for the year might be large enough that you are required to make quarterly estimated tax payments or small enough that you can skip the quarterly payments and pay all the tax due at once with your annual tax return.

The dividing line is $1,000 of tax due at the end of the year in addition to the tax you had withheld and your refundable credits. If you expect to owe more than $1,000 in additional tax for the year, you should make quarterly tax payments, unless you fall into one of the exception categories discussed in the next section. If you expect to owe less than $1,000 in additional tax, you don’t have to make those quarterly payments and will just pay everything you owe with your annual tax return.

For individuals who receive only fellowship income not subject to tax withholding throughout the calendar year, the calculation is straightforward: How much income tax will you owe for the year, greater or less than $1,000?

For individuals/households with fellowship income not subject to withholding plus employee income subject to withholding (e.g., one person with part-year fellowship income and part-year employee income, one spouse with fellowship income and one spouse with employee income), both the total amount of tax owed across all incomes and the amount withheld must be taken into consideration. If you will owe more than $1,000 in additional tax at the end of the year and don’t fall into an exception category, you should file quarterly estimated tax.

Having a combination of fellowship and employee income is very common for PhD trainees, especially if they are married. My tax workshop addresses how to handle this particular scenario in detail.

Click here to learn more about the estimated tax workshop.

Who Doesn’t Have to Pay Estimated Tax?

Some people who owe more than $1,000 in additional tax at the end of the year are not required to make quarterly estimated tax payments.

  1. If you had zero tax liability in the previous tax year, you are not required to make quarterly estimated tax payments in the current tax year. For example, if last year you were a undergrad or grad student with a low enough income that you didn’t pay any income tax, you’re not required to make quarterly estimated tax payments this year. Please note this refers to your overall tax liability for the year, not whether you had to make a payment when you filed your return.
  2. If the sum of your tax withholding throughout the year and refundable credits equals or exceeds 90% of the tax you expect to owe this year, you are not required to make quarterly estimated tax payments. For example, if your spouse earns the lion’s share of your household income and has a generous amount of tax withheld automatically, your household’s overall tax withholding might be sufficient to exempt you from making quarterly estimated tax payments on your fellowship.
  3. If the sum of your tax withholding throughout the year and refundable credits equals or exceeds 100% of the tax you owed last year, you are not required to make quarterly estimated tax payments. For example, if last year you finished undergrad and started grad school with a stipend, your tax owed for the year was likely quite small. If you have assistantship pay with tax withholding for part of this year and then switch to a fellowship with no withholding, your tax withholding from your assistantship might cover 100% of your tax owed from last year, and you wouldn’t be required to make quarterly estimated tax payments.

The best way to estimate your tax due this year along with your withholding and refundable credits and determine whether you are required to pay quarterly estimated tax is to fill out Form 1040-ES.

Psssst… Want to take a shortcut? If you have no interest in filling out Form 1040-ES’s Estimated Tax Worksheet, join my tax workshop. I explain a shortcut method to make sure you pay enough in estimated tax to avoid a fine without having to complete an advance draft your tax return this year. This method will only take a few minutes!

Click here to learn more about the quarterly estimated tax workshop for fellows.

Fill Out the Estimated Tax Worksheet in Form 1040-ES

Form 1040-ES, specifically the Estimated Tax Worksheet (p. 8), guides you through 1) estimating the amount of tax you will owe for the year, 2) determining if you are required to make quarterly estimated tax payments, and 3) calculating the amount of your required estimated tax payment.

I’ll point out a simple approach to filling out the Estimated Tax Worksheet for individual taxpayers/households with only fellowship and employee income. If you additionally have self-employment income or other types of income, your approach will be more nuanced.

If your fellowship income is disbursed frequently throughout the year (e.g., once per month for the entire year), this simple method will work for you. If your fellowship income is disbursed infrequently (e.g., 1-3 times per year) or throughout only part of the year (e.g., only the fall term after switching funding sources), keep reading for an alternative method.

The important numbers a fellowship recipient needs to plug in to Form 1040-ES to fill it out are:

  • Line 1: Your expected Adjusted Gross Income (AGI), which is your total income for the year less your above-the-line deductions (e.g., deductible portion of student loan interest paid, traditional IRA contributions). Your AGI includes your fellowship income, taxable scholarship income (if applicable), and any wages you (and your spouse) received, e.g., from an assistantship.
  • Line 2: Your deductions. If you plan to itemize your deductions, you should enter the total of those itemized deductions in line 2a; otherwise, enter the amount of your standard deduction (in 2024: single $14,600, married filing jointly $29,200).
  • Line 7: The sum of your credits if you plan to take any. Examples of credits include the Lifetime Learning Credit, the Child Tax Credit, and the Child and Dependent Care Credit.
  • Line 11b: The sum of your refundable credits if you plan to take any, such as the Earned Income Credit or the Additional Child Tax Credit.
  • Line 12b: Your total tax liability for the prior year.
  • Line 13: Income tax you expect to be withheld throughout the year. This can generally be extrapolated from your most recent pay stub.

If you come to the worksheet with this set of numbers, all you need to complete it is to follow the arithmetic steps instructed in the form and to look up your tax due using the Tax Rate Schedule on p. 7.

Once you fill out the worksheet, line 11c will tell you the total amount of tax that it is estimated you will have to pay for the year. The rest of the form helps you determine the minimum amount of quarterly estimated tax you have to pay to avoid a penalty, which might be $0. Both of these numbers are key for your tax planning for the year; don’t just make the minimum payments necessary and forget that you might owe additional tax along with you tax return in the spring.

Are you curious about the rest of the lines in the Estimated Tax Worksheet and wondering if you need to fill them out? My workshop devotes a module to explaining each line so you can determine if they apply to you or not.

Click here to learn more about the estimated tax workshop.

Method for Irregular Income

If you receive your income unevenly throughout the year, the IRS has a method for calculating a different amount of estimated tax due in each quarter, the Annualized Income Installment Method (see Publication 505).

Essentially, you calculate your tax due for each quarter based on your cumulative income up to that point of the year. Ultimately, you can pay the lesser of the estimated tax calculated through this worksheet or the quarterly estimated tax calculated from the previous method. (This is helpful if your income is higher later in the year than earlier; you don’t have to pay the extra tax until you actually receive the income.)

If you receive your fellowship income irregularly throughout the year—particularly if you are paid more later in the year than earlier—and want to be very exact about the amount of estimated tax you pay each quarter, you should fill out the Annualized Income Installment Method Worksheet after you complete the Estimated Tax Worksheet.

However, the Annualized Income Installment Method is a very complicated and fiddly worksheet, so if you don’t mind just making the regular quarterly payments, perhaps with guesstimate adjustments, that’s going to be faster and easier. For example, if you have tax withholding in place for much of the year through your assistantship but switch to fellowship funding for just the fall semester, your estimated tax payments all need to be made in the last one or two quarters, not the earlier part when you were having tax withheld.

Join my tax workshop for more details on how to handle quarterly estimated tax when you switch on or off of fellowship mid-year, a common scenario for fellowship recipients.

Click here to learn more about the estimated tax workshop.

Paying Your Quarterly Estimated Tax

If you are required to pay quarterly estimated tax, you have many options for doing so, such as by mail, over the phone, and through the IRS2Go app. The easiest method is most likely through the website IRS.gov/payments, where you can choose to make a direct transfer from your checking account for free or to pay using a debit or credit card for a fee.

The due dates for your 2024 quarterly estimated tax are:

  • Q1: April 15, 2024
  • Q2: June 17, 2024
  • Q3: Sept 16, 2024
  • Q4: Jan 15, 2025 (or Jan 31, 2025 if you file your annual tax return by that date)

Please note that these dates are not at 3-month intervals. Quarter 1 is three months long; quarter 2 is two months long; quarter 3 is three months long; quarter 4 is four months long.

Penalties for Underpaying Tax throughout the Year

There are penalties for failing to make estimated tax payments when you are required to do so or underpaying your estimated tax. The penalty is calculated separately for each quarter, so you may be penalized for underpaying in an earlier quarter even if you made up for it in a later quarter. The details about the penalties can be found in Publication 505.

State Quarterly Estimated Tax

Your state and/or local government may also require you to make estimated tax payments.

Set Up a System of Self-Withholding

If you are going to owe any income tax for the year and do not have automatic income tax withholding set up, you should intentionally prepare for your tax bill, whether or not that tax is due with your annual tax return or quarterly.

My recommendation is to set up a separate savings account labeled “Income Tax” or similar. With every paycheck you receive, transfer into your savings account the amount of money from it that you expect to pay in income tax. For example, if you receive monthly fellowship paychecks, you should set aside 1/12th of the amount you calculated in Line 11c (rounding up). When you pay tax quarterly or annually, draw the payment from that dedicated savings account.

For more details about how to set up this kind of system and save in advance for each of your tax deadlines, join my tax workshop.

Click here to learn more about the estimated tax workshop.

How to Avoid Paying Estimated Tax Using Your Spouse’s Withholding

If you are married filing jointly with one spouse receiving a fellowship not subject to withholding and one spouse subject to automatic withholding, it is possible to set up the withholding on the employee income so that you don’t have to pay quarterly estimated tax on the fellowship.

The idea is that you will increase the automatic withholding on the employee’s income so that it covers what you owe in tax for the year as a couple. This involves filing a new Form W-4 with your spouse’s employer.

The simplest way to make this change is to enter an additional amount of money on Form W-4 Line 4c to have withheld from each paycheck (Form 1040-ES Line 11c divided by the number of paychecks your spouse receives per year).