muskratsam

I just finished my sign, heading out tomorrow to join the march for part of the morning. I can't stay the whole time, but I think this is an important safety issue for us as teachers at universities just as it is for high school students. I really want to encourage these high school students to keep at this and help make a change. Anybody else going in their city?

Sorry, didn't think Dad was relevant until that post. Although I think most people who have paid taxes more than a few times know that the withholding is just a guess, and then it just gets "trued up" with what you really owe when you do a return. Main point of all this is that those of us with TA/RA tuition waivers get to avoid reporting them as income for 2018, and we can still take the LLC. We can certainly revive this thread or start a new one if they go after those benefits again in the future!

The reason they've given the TA and RAs a tax exemption (and not others with waivers) is because they make universities and our research structure run. That is important to the universities and grant giving-organizations, so that is how it came about to start with. Yes, of course the LLC credit could be bigger than the overall tax bill, and then the student doesn't get that extra money. But that is not the same as WITHHELD. I expect I will owe federal tax in 2017, the LLC will reduce that tax owed by a couple hundred dollars (fees to my university), and I won't have nearly enough deductions to itemize. All will still be true in 2018. And YES, you can use the money to get a refund. Here is what I'm trying to say: It doesn't matter what was withheld from my paycheck. When I file my return with income, deductions (if I could itemize), etc., THAT is when the tax due is calculated. The withholding is merely a convenience (although if I under-withhold, I could pay a penalty). I could withhold on the nose, but it is my return that shows if I had a tax bill for the year (maybe already paid via withholding, but that is just accounting). I still have to file a return, and would get that couple hundred dollars in a refund due to the LLC, assuming my total tax owed for the year (regardless of withholding) was more than the LLC credit amount. So say I withhold $1000, and my tax bill is exactly $1000. But when I file, I claim the LLC on $1200 in university fees. Then I would get a $240 refund from the IRS. You are mixing up withholding (which is just essentially collecting some of the tax, but not calculating what you owe) and the actual tax owed (what your tax return shows). I listen to NPR as well, and grew up with a tax attorney who worked for gov't as my dad. It takes time to engage the IRS and other agencies who have to execute these types of rules to give considered input. I'd agree that maybe in the beginning of the process they had IRS input on a lot of it. But those last couple weeks of negotiations and middle of the night changes, no way did the experts have time to dig down on all the last minute changes. Which will likely result in an interesting 2018, to say the least. I'm a grad student at a state university in a red state, so I get it to an extent. But state residents still want their kids to be able to attend the state university, and have TAs to support the classrooms there. And your Ivy argument is confusing to me. The media (1) generally did not favor the tax bill, (2) doesn't want to antagonize readers and KNOWS that the Ivy League is kind of a poisonous example these days. But that is where the most waived tuition money is, so that is where the best story was. They'd rather have picked a state university, but it made a better dollars/cents story to pick an Ivy League. I noticed MIT cropping up in several stories -- I wondered if that was maybe a more palatable school to the public than an Ivy these days, but it still fits the model they wanted of an alarmingly large tax increase for a grad student.

"My point is that with Congressional Republicans the idea is to change the status of stipend from 'covered by employer' to being compensation received from work done making the waiver a part of your pay." Yes, that was the entire point of this thread. I do work as a TA, so my waiver is not taxable income under current (or under the new tax law). I don't itemize -- I don't have enough deductions to make it worthwhile (the current and future standard deductions are a better deal for me). The LLC is a straight 20% tax credit. I think I can take that on the fees I pay to my university (something like $1200 in fees per year, so 20% of that). A tax credit changes the amount that you owe in tax, regardless of what was withheld. Let's say the exact right amount was withheld from my stipend -- then I should get back the amount of the LLC credit in refund. Withholding is a convenience -- I still have to file a return anyway, and THAT is how my exact tax owed is calculated. They expect you to withhold or pay estimated taxes within a reasonable amount of what is owed. But the return is the final word on it. So why wouldn't I take the LLC on my university fees, and reduce my overall tax bill? I think you are off base about why reporters focused on Ivy League grad students. It has nothing to do with their political bent (in fact, I'm not sure you are right about that leaning even). If they did focus on Ivy League students in their reporting it is because the dollar impact was most dramatic there. Tuition is higher at a private research university -- so if the waiver is for more money, then then resulting tax bill increase in actual dollars is bigger. Hence a better story. $40K of an income bump via taxing tuition sounds a lot more dramatic than taxing $20K at a state university. I think lawmakers changed their mind for a few reasons: - The Senate is slightly more mature and sane than the House (I realize the bar is low, but so be it). Senators are a bit less inclined to gut higher education, and they probably couldn't get the votes in the Senate. It was a non-starter with some Republican Senators, even though they weren't vocal to the press about it. - State universities in Republican states were hit just as hard by the tuition waiver tax than in states more like to vote Democratic. All those universities rely heavily on TAs for teaching and research support in their university system. I think House and Senate members in ALL states heard from grad students that this was a bad idea. Speaking up does change votes. I also think that it is laughable to think that they had time to consult the IRS on what could and couldn't be easily turned into policy, including on the tuition waiver. None of this was vetted much, if at all, by the IRS. The negotiators were scribbling by hand in the margins at midnight -- not holding meetings with the IRS for a rational discussion of what could and couldn't be done. As will be evidenced in the chaos this law will cause in 2018 and 2019. Already happening with homeowners trying to figure out if they can pre-pay property taxes, and the IRS attempts to provide clarification. The implementation of what they did pass is going to make the Affordable Care Act look smooth as velvet.

My tuition is waived, so isn't an itemized deduction (I think it isn't, this is my first year, so am not positive). I am under the impression that my waived tuition is considered a qualified tuition reduction. So I don't have to include it in income at all. I don't see how that has anything to do with itemizing. So I think I do get to take the LLC for 20% of the fees I pay my university AND have a tuition waiver that isn't taxed. Am I missing something? I don't see this coming back around again soon. I think there was a fair amount of behind the scenes maneuvering to KEEP this from happening. My take is that there are a fair number of Republican reps and senators who know how shortsighted this is. They may not want to shout it from the rooftops given the anti-education stance of some of their constituents. But they know it is a bad idea. Even in the house, there were a bunch of Republicans who did speak up on it eventually.

The Lifetime Learning credit is also apparently intact in the current bill. It is still not a good bill, and I hope somehow it doesn't pass, but some of the most direct hits at grad students have been avoided.

Reconciliation meetings are in process, and today could be a big day for decisions. It would be a good day to call again to your representative and senators, even if you have already done so in the past. This topic is getting a lot of discussion in DC right now, so let's make sure they know that we care about this.

Good work, everyone who called, protested, and contacted Senators and reps in various ways. It does make a difference! Keep it up, the bill is not final yet! Be sure your union is also aware of the loss of the Lifetime Learning tax credit if that is lost in the bill. Right now we can take a credit (direct reduction of the amount of tax owed) of 20% of the fees we pay the university -- that credit goes away in the House version, and could in the final version as well. The only credit left will just be for undergrads.

The Senate version may not be the final version. The two versions have to be reconciled, and of course the House members still want their changes (the t,ax waiver and elimination of the Lifetime Learning credit) to prevail. They MIGHT just accept the Senate version as is, though -- happens sometimes. Then both chambers (house and senate) vote again, and the president signs it.

I think the concern is that any wholesale reclassification could be challenged by the IRS as tax avoidance.

Here is another calculator that shows state tax impact of the proposed House bill. Although it doesn't consider university provided health care taxable. www.tinyurl.com/GradTaxCalc

It is $12.9 Billion that aren't paid directly in federal taxes today by individuals in the middle class. They will be paying more in taxes, and corporate entities and the top 1% of individuals will be paying less in federal taxes. So call it what you will.

They hope to get a bill signed into law before Christmas. A "holiday gift for America" per the current White House occupant. It is correct that the version that passed the Senate does not have the tuition waiver taxation in it, and I think it also retains the Lifetime Learning Credit. They will start work on reconciliation with the bill the house passed this weekend, I think. No telling how long it will take or what form the final bill will take. Sometimes the House just decides to accept the Senate's version of the bill rather than try to hammer out a bill that they can agree on in both houses. So that could happen here. It is still a huge wealth transfer from the middle class to corporations and the 1% ($12.9 billion flowing from one to another by 2027), so either way it will likely hit almost all of us. But the immediate decimation of graduate education MIGHT be avoided.

Here is a calculator some grad students put together. If you dig into the details and links in the calculator, it is pretty useful to see the possible impact. https://docs.google.com/spreadsheets/d/1qmh7E0y9B8xDfHP2ovxSHhnUVFVYwoO9OK33iHShtCo/edit#gid=0 One thing I wasn't aware of before is that depending on how your university provides health insurance, your taxes apparently could go up on that as well. If some or all of the cost is considered part & parcel of your tuition waiver, you aren't current taxed on that extra cost. But if it is outside that, I guess we already pay tax (I'm a first year, haven't seen a W-2 yet, so am not certain). So that could be another tax increase for some students. MIT is the example where there would be an increase for the health insurance. No one really knows what is in the bill that they are voting on at this moment. I haven't heard that the tuition waiver tax made it into the Senate version, but can't be sure. And reconciliation could still add it in.

It is frustrating that not ONE Republican Senator seems to have made a statement standing up for higher education. You'd think that something the US leads the world in is something they would want to preserve. 17 of the top 25 ranked universities in the world are in the US and rely on this system of TAs & RAs to support research and help educate undergraduates. The bill continues to roll forward, with amendments being offered in the Senate tomorrow, and a vote as early as tomorrow night. Then the bill will go to reconciliation (unless the House decides to accept the Senate version, which at this moment does not appear to tax tuition waivers, but that could change at any time, and no one has the full text of the bill at the moment). After reconciliation it has to be voted on again by both chambers, then goes to the president for signature.