aridneptune

Hello everyone - I'm going to be starting my PhD program in the fall and I have several questions about my stipend. My school does not provide a 1099 or W2 for graduate students on a stipend: it's our responsibility, it seems, to report for ourselves. I believe that, with no tax withholding and more than $1000 owed in a year, one is obligated to file estimated quarterly taxes with the IRS (and the relevant state authority, which in my case will be Illinois). Fine - I'm happy to do that. I do have one complicating factor: my spouse will be working full-time while I study. For anyone in a similar situation: do you file and pay estimated quarterly taxes for your spouse's income as well? (Note: she will have taxes withheld from her income every pay period). Or only for the stipend income? Finally, is the tuition waiver also taxable income? I suppose it doesn't matter much as I can simply take a deduction for the full amount (since tuition is deductible). Thanks in advance for any advice!

ginagirl and toyoujhj: for what it's worth, I know of at least two people who are heavily leaning toward declining their Hopkins offers. So hang in there.

I got the acceptance email last week. Maybe they're doing the 'informal wait list' sort of deal that they mentioned at the visit day.

Sure, no problem. That goes for everyone reading this thread in future as well.

Well, I'm not saying that having an advanced degree hurts. My experience has been that connections predominate everything else in terms of getting hired. And if a group's managing director went to NYU Stern and you've got an NYU MFE Master's you'll be looked kindly upon. There are groups and functions within the banks that want MFEs, math PhDs, physics PhDs and so forth. These groups are mainly [Note: I use 'guys' to mean 'guys or girls'] (1) programmers (who write the risk models, electronic trading algorithms, etc.); (2) structured products guys (who put together portfolios of diverse securities tailor-made to a client's risk/return/exposure needs); (3) highly quantitative research guys (who develop proprietary risk-analysis or screening methodologies...though frankly these are a dime a dozen); (4) quantitative risk-management guys (who slice-and-dice the firm's risk exposure, analyze it, stress it, and present the results to management). And even groups in these roles regularly take in candidates without the requisite education and train them up themselves. That said, the vast majority of roles do not require an advanced degree. A typical research analyst uses a pretty basic balance-sheet Excel model, screens for leveraged buy-out candidates with simple rules-of-thumb, and so forth. A typical strategy research analyst uses straightforward regression at most. Real front-office 'revenue generators' (traders, salespeople, investment bankers, etc.) do not need any special training. The banks care primarily about experience...and I can say from personal experience that that's the most important predictor of success in the financial industry. Much of the knowledge required and used here is highly specialized - and the degree of pressure is high. I don't think you'll be able to prepare for it without having to go through the crucible of experience. However, a master's or PhD certainly doesn't hurt. One of the most successful junior salesmen on my desk has an Econometrics MS: a degree he emphasizes is totally worthless. Incidentally, his comments about his job may be relevant: 'How much do I like what I do at work? 3 out of 10. How well-compensated do I think I am for the work I do? 9 out of 10.'

I'm sure your school's financial aid office will know the answer :-)

Excuse me, I wasn't thinking about the international students. You may want to check with your tax authority, the IRS and your school's financial-aid office. It seems like foreign nationals with a tax treaty have to report stipend income but not pay state, federal or FICA taxes on it. That said, the IRS Publication (pdf) on the issue is pretty vague: "A student or business apprentice who is a resident of the United Kingdom immediately before visiting the United States and is in the United States for the purpose of full-time education at a recognized educational institution or full-time training is exempt from U.S. income tax on amounts received from abroad for the individual's maintenance, education, or training." No mention seems to be made of stipends received from U.S.-domiciled insitutions. Based on this, I'd assume (contrary to the Chicago link) that you'll have to pay state and local taxes on your stipend. That said, they'll be pretty low and you'll be exempt from FICA.

Chachaw: I work in the financial industry. Outside of a very, very limited subset of roles (mainly structured credit and tech) a master's degree is completely unimportant. In fact, a master's degree is basically valueless to banks. Even an MBA is basically valueless except to get your foot in the door (which you already have). Only experience and results matter. If you prove yourself a diligent and intelligent research analyst who can write halfway decently, you'll get promoted. Or actually, you'll get poached by some hedge fund or private-equity shop and make three times what you were making at a bulge-bracket investment bank. Now if you prefer to write research reports no one reads, then of course you can stay. But the degree will not matter at all. So if it's a career in finance you're after, I'd say take the job - at least for a few years.

When you say an investment bank's front office - what role? IBanker? Trader? Salesperson? Research?

Come on, of course you need to pay taxes. It's income, isn't it? There is, however, a carve-out for FICA taxes. Full-time students don't have to pay payroll taxes (7.5%, so that's pretty significant).

I got an acceptance letter to Hopkins yesterday. It was an email from the administrative assistant with the graduate chair CC'd. Now my choice is Hopkins Biostat vs Cornell Stat vs Michigan Stat vs UNC Biostat. Any thoughts on the relative strengths / weaknesses and focus areas of these schools? What does everyone think?

I also got rejected from Berkeley just now.

Listen I don't mean to burst your bubble, but living in NYC is expensive enough with a full-time six-figure job. On a stipend? I couldn't imagine doing it.

Congratulations Stat Applicant! I'm really glad things are working out for you. To clarify: this was for UNC Stats. The email was a bit weird since it started out 'attached is the offer letter'

I completely agree with this. The first sentence seems intimidating and important but really isn't. I started mine with the very generic 'My name is xyz and I am applying to abc.' As a set of general pointers I'd suggest you look over cyberwulf's sticky about SoPs at the top of this forum.