Taxes

[American in Beijing]

So I've just gotten my first acceptance (yay me!) and I'm looking at this fellowship stipulation trying to figure out what it actually means. Can a current grad (or anyone who knows more about how the tax system works) explain to me how it works?

Let's just say that I get $14,000 a year (not my actual funding amount) to go to school in California. I'm single, rent an apartment, and am still in a massive amount of debt from my undergrad education (most of which is through loans run by the state of MA). How would I calculate how much money I'll have after taxes?

[zxcv]

Try the Federal tax estimator at H&R Block, and look up California tax rates:

http://www.hrblock.com/taxes/tax_tips_calculators/

http://www.ftb.ca.gov/forms/2009_California_Tax_Rates_and_Exemptions.shtml

If you earned $14,000 in 2009, you would owe $65 in federal taxes (after subtracting $400 thanks to the Making Work Pay tax credit) and $184 to California (after the $60 renter's tax credit). That's only $250 in taxes for 2009. Note that the Making Work Pay tax credit will expire after 2010 when you'll owe an extra $400 per year (you're taxed at 10% over $9,350 in income). You might get additional credits due to the student loans -- I'm not sure (I was giving you the standard deduction).

Fellowships are NOT tax exempt unless you use them to pay for tuition, mandatory fees or books, even if taxes are not withheld. But at only $14,000 per year you will owe hardly any taxes anyways.