Taxes Taxes

[nazzaz99]

Hi!

Does anyone know how much taxes will eat away from our fellowships? Mine will be 23K before taxes. Thanks.

[bgk]

Hi,

If it's a really a fellowship and you're on F1 or J1 you'll pay a flat rate of 14% (federal). If it's a stipend/earnings you'll pay state and federal taxes at the relevant rate - see tax charts. Some countries (e.g. China) have treaties with the US which mean their students pay less tax.

[soundboard]

any methods of saving taxes legally?

[liszt85]

From: http://www.irs.gov/publications/p519/ar02.html#d0e13626

India

1. I was a resident of India on the date of my arrival in the United States. I am not a U.S. citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am visiting the United States for the purpose of teaching or conducting research at [insert the name of the university, college, or other recognized educational institution]. I will receive compensation for my teaching or study activities.

3. The teaching or research compensation received during the entire tax year (or during the period from to ) for these activities qualifies for exemption from withholding of federal tax under the tax treaty between the United States and India.

4. Any research I perform will be undertaken in the public interest and not primarily for the private benefit of a specific person or persons.

5. I arrived in the United States on [insert the date of your last arrival into the United States before beginning the services for which the exemption is claimed]. The treaty exemption is available only for compensation paid during a period of two years beginning on that date.

Does this mean I don't have to pay the 14% fed tax?

[Firled]

As for taxes, out of my $20K stipend I pay about $2800 per year. You do receive a percentage of it back once you complete your state and federal tax.