Taxes on Stipend

[juliesre]

Exactly what taxes must we pay on our stipend???

[math123]

Depends what state, but you will have to pay federal income taxes at a minimum. The portion of your award not used for tuition is considered taxable income. Generally, expect to pay about 10-15 percent. You'll have to make quarterly (estimated) payments to the IRS to avoid heavy penalties in April. Your institution should provide you with the necessary information. Be forewarned, many schools do not withhold taxes on your behalf; you'll have to do this yourself.

[Philmajor]

I just completed my taxes and I don't owe on either state or Federal! YIPPEEEE

[rising_star]

City/county and state taxes will be taken directly out of your stipend, if applicable. Federal taxes will also be taken out directly. You won't have FICA or any social security taken out of your paycheck. You may get some of the state and/or local taxes back when you file...

[math123]

rising_star, that's not true! Schools are not required to withhold taxes on your behalf, and in many cases, won't.

[rising_star]

Depends on how you're employed. If you're employed as a TA working for the university, they are required to take out the money. If you're paid out of a fellowship or grant then things do work differently. And, just because it's not withheld does not mean it is not owed.

[maybe77]

i've had a stipend for graduate assistant and TA duties and the school has taken out taxes - you have to fill out a W2 like any other job. I have also received fellowship money and you need to pay taxes on everything that is used to live on. In some instances, you need to remember this as you don't always get a letter from the organization around tax time to jog your memory.

[scigrad]

A stipend is taxed like any other income from any other job. A fellowship can be tax free, provided you spend the money on "qualified educational expenses." These expenses do not include car/food/housing, etc. A laptop you can probably claim. Otherwise, you have to pay up to the gov't.

[latetothegame]

Just make sure your school is not reporting tuition remission as income on your W-2 at the end of the year. My M.A. institution did, and I only discovered it after I filed the first year; I was able to submit a revised return and get an increased tax return. For the record, withholdings were automatically applied to every paycheck since I was considered a university employee as a G.A. and not a fellowship or grant recipient.

[liszt85]

WHat is the minimum annual income that is taxable?

I'm getting around $18K in Columbus (including the summer stipend that comes from a professor's research grants). Does anybody have any idea about the taxes on this income?

Also, I hear from some people that they had got back ALL of the tax money when they filed for returns at the end of the year. Is there some India-US tax treaty that does this?? (I read about some such Ind-US treaty on the IRS website but couldn't make much sense out of it, so if anybody has an idea about this, please do let me know) As far as I'd understood, you could only claim the money that you spent for academic purposes but some Indian students seem to tell me that they'd got back all their tax money! How is that possible?

[liszt85]

WHat is the minimum annual income that is taxable?

This question leads to this one: So since the autumn term starts only in mid Sept, I would have an annual income of only about $5K for 2009. So I guess this won't be taxed as taxes are calculated on a calendar year (is that right?)?

[Falmouth]

For Federal, $5K not taxed but state may be, depending on state.

[rising_star]

This question leads to this one: So since the autumn term starts only in mid Sept, I would have an annual income of only about $5K for 2009. So I guess this won't be taxed as taxes are calculated on a calendar year (is that right?)?

You'd have to look up the state taxes for OH and whether Columbus has any city/county income tax. Often those do not have a minimum income threshold...

[Strangefox]

Depends what state, but you will have to pay federal income taxes at a minimum. The portion of your award not used for tuition is considered taxable income. Generally, expect to pay about 10-15 percent.

So 10-15 percent means federal plus state tax or only federal?

[LockeOak]

I believe my tax last year on a stipend of $19,800 was approximately $1600, roughly $1000 federal and $600 state after taking the standard deduction.

[Eigen]

Also note that if you will owe under $1000, you do not have to pay estimated taxes quarterly.

My school does not take taxes out of my stipend, as it is from a fellowship, so I have to estimate the yearly taxes and pay/not pay estimated taxes based on that.

Being that I'm married, after the standard deduction I usually owe under $1000, but I have to check each year.