Uncle Sam is One Greedy MoFo
Ugh, tax season again? Didn’t I just file my taxes? I hate all the stupid tax commercials that show people getting thousands of dollars back. Wanna know how much I got back last year? Well, sorry, but that’s privileged information. It wasn’t more than like, $100, I can tell you that. After paying back what I owed, there was probably enough left over to treat myself to a nice lunch at Chipotle (b/c that’s a splurge; normally, I would have just gone to Taco Bell).
Having served with AmeriCorps for two years, taxes are a little bit of a touchy subject for me. When I was a VISTA, I lived at the poverty level. I’m not complaining; I knew what I was signing up for. I made less than minimum wage, received food stamps, and had no qualms about signing up on craigslist for focus groups and studies (although I did draw the line at the guy near Porter Square who was looking for women who often blacked out to do a study on alcohol; that couldn’t have turned out well for either parties). While my overall experience with the program is mixed, I do have a very strong opinion on one aspect: the Education Award. And more importantly, the havoc it can wreak on your taxes.
If you’re not familiar with AmeriCorps (and I know most people aren’t; do you know how sick I am of saying, “It’s like the domestic Peace Corps”?), you can learn more here. I’m specifically keeping this rant about the Ed Award (although the rants and raves I have about my service years could provide more than enough material to fill this blog…hmmm….), which is short for the Education Award. It’s money you can use toward your student loans, or apply to tuition/expenses if you want to go back to school. Sounds awesome right? Wrong. Because, for reasons that can only be understood by the genius minds of the Corporation for National and Community Service, it counts as taxable income.
“The Segal AmeriCorps Education Award, unlike most other forms of scholarships and fellowships, is subject to federal tax in the year the payment is made. It is considered taxable income regardless of whether it’s used for current educational expenses or to repay a qualified student loan. When and how much of the education award you redeem may have an impact on your overall income tax responsibility.” Courtesy of their website. Oh, now I get it.
Actually…I don’t get it. I do a year of service TO MY COUNTRY, enticed by the fact that I’ll be getting an Education Award to help my pay back my student loans. And this “benefit” is taxable income, that moves me to a higher tax bracket, and takes even more money out of my pocket?
This is a common topic of discussion for AmeriCorps members, both current and alums. I don’t think any of us really understand it. We just get our tax refund (or pay what we owe) and blankly look at the guy who just spent the entire Saturday filing our taxes (b/c he probably doesn’t understand the damn Ed Award either) while he tries to let us down gently.
I got my final W-2 and tax-necessary information in the mail yesterday. I should have all the materials to file. But I’ll probably put it off for another few weeks. I’ll see some more of those stupid H&R Block commercials, where people get their enormous refund checks. I’ll even suffer from the illusion that maybe this year will be different, that maybe I will get a big refund this year. And after I finally file them, I’ll take my inadequate check and head to Chipotle – maybe I’ll even have enough to treat my guy (but don’t get your hopes up, B).
Having served with AmeriCorps for two years, taxes are a little bit of a touchy subject for me. When I was a VISTA, I lived at the poverty level. I’m not complaining; I knew what I was signing up for. I made less than minimum wage, received food stamps, and had no qualms about signing up on craigslist for focus groups and studies (although I did draw the line at the guy near Porter Square who was looking for women who often blacked out to do a study on alcohol; that couldn’t have turned out well for either parties). While my overall experience with the program is mixed, I do have a very strong opinion on one aspect: the Education Award. And more importantly, the havoc it can wreak on your taxes.
If you’re not familiar with AmeriCorps (and I know most people aren’t; do you know how sick I am of saying, “It’s like the domestic Peace Corps”?), you can learn more here. I’m specifically keeping this rant about the Ed Award (although the rants and raves I have about my service years could provide more than enough material to fill this blog…hmmm….), which is short for the Education Award. It’s money you can use toward your student loans, or apply to tuition/expenses if you want to go back to school. Sounds awesome right? Wrong. Because, for reasons that can only be understood by the genius minds of the Corporation for National and Community Service, it counts as taxable income.
“The Segal AmeriCorps Education Award, unlike most other forms of scholarships and fellowships, is subject to federal tax in the year the payment is made. It is considered taxable income regardless of whether it’s used for current educational expenses or to repay a qualified student loan. When and how much of the education award you redeem may have an impact on your overall income tax responsibility.” Courtesy of their website. Oh, now I get it.
Actually…I don’t get it. I do a year of service TO MY COUNTRY, enticed by the fact that I’ll be getting an Education Award to help my pay back my student loans. And this “benefit” is taxable income, that moves me to a higher tax bracket, and takes even more money out of my pocket?
This is a common topic of discussion for AmeriCorps members, both current and alums. I don’t think any of us really understand it. We just get our tax refund (or pay what we owe) and blankly look at the guy who just spent the entire Saturday filing our taxes (b/c he probably doesn’t understand the damn Ed Award either) while he tries to let us down gently.
I got my final W-2 and tax-necessary information in the mail yesterday. I should have all the materials to file. But I’ll probably put it off for another few weeks. I’ll see some more of those stupid H&R Block commercials, where people get their enormous refund checks. I’ll even suffer from the illusion that maybe this year will be different, that maybe I will get a big refund this year. And after I finally file them, I’ll take my inadequate check and head to Chipotle – maybe I’ll even have enough to treat my guy (but don’t get your hopes up, B).
Comments