The stipend amount that we see on the offer letter is not what we will take home. We will have to pay both federal tax and state tax on our stipend.
I am personally not very familiar with the tax rates involved, and I am sure there are several other students (especially intl students) who are not 100% clear on how much we will end up paying as tax. Would some knowledgeable folks here care to englighten us on this?
From what I have read, it seems we have to pay a federal tax of 14% on what we earn above $ 8500 and the money we spend to buy books and lab supplies + a state tax that varies a lot from state to state + in few cases like New York City, a city tax.
A clear implication of the variable state tax is: if you are comparing stipends of different programs, please be sure to take the sifferent state taxes into consideration. For example, Providence seems to have a much lower state tax than New York. Also, do you know any site that gives reliable info on the tax rates in different states? I have come across two sites that seem to give somewhat conflicting info on state tax rates!