Grad stipends and taxes

[JustChill]

Does anyone know if grad stipends are taxed as regular income or are there some special regulations for that? I can't find anything too reliable online.

Can anyone ballpark what kind of a percentage we're looking at here, with local, state, and federal combined? Some people have been telling me that it might be as high as 30%.

[outlawesq]

Does anyone know if grad stipends are taxed as regular income or are there some special regulations for that? I can't find anything too reliable online.

Can anyone ballpark what kind of a percentage we're looking at here, with local, state, and federal combined? Some people have been telling me that it might be as high as 30%.

Go to www.irs.gov & you'll find a publication on this topic. Graduate awards are generally taxable for one of two reasons: either you work in exchange for the money, i.e. TAing, or its used for non-qualified expenses such as living expenses. Any tuition scholarship is generally not taxable because tuition is a qualified education expense.

You can get a credit though for other expenses that will come out of your stipend such as books.

Its hard to say what rate you'll be taxed at without knowing the amount of the stipend and your entire financial picture. Unless you're one of those lucky few who are getting $30k stipends, I'd say you'r e far from the 28% bracket though.

[BumblebeePlan]

I had a 12K TA-ship as an MA student, and very little was taken out for taxes--I'd guess less than 5%. Of course, this was in a state with no income tax, so YMMV.

[dflanagan]

Go to www.irs.gov & you'll find a publication on this topic. Graduate awards are generally taxable for one of two reasons: either you work in exchange for the money, i.e. TAing, or its used for non-qualified expenses such as living expenses. Any tuition scholarship is generally not taxable because tuition is a qualified education expense.

You can get a credit though for other expenses that will come out of your stipend such as books.

Its hard to say what rate you'll be taxed at without knowing the amount of the stipend and your entire financial picture. Unless you're one of those lucky few who are getting $30k stipends, I'd say you'r e far from the 28% bracket though.

Most stipends (between about 8500 and 34000 dollars a year) are in the 15 percent tax bracket. My stipend next year will be 20k, so the first 8.5k or so is taxed at 10 percent and the remaining 11,500 is taxed at 15 percent. This works out to about 2500 a year in federal taxes. State taxes vary. In Massachusetts, it's 5.3 percent regardless of income. That's another 1000 dollars a year, so I'll lose about 3500 a year in state and federal taxes. Only the stipend portion of aid is taxed. You can also deduct things like books and education expenses from your federal taxes, as I hope to. I'll really only have about 17,000 a year to live on, which in Boston/Waltham isn't much... but I didn't sign up for grad school to make money :/