Income Tax on Stipend

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excel
Posts: 257
Joined: Tue Feb 19, 2008 2:33 am

Income Tax on Stipend

Postby excel » Wed Mar 12, 2008 3:23 pm

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!

forecast8
Posts: 20
Joined: Wed Feb 27, 2008 9:55 pm

Re: Income Tax on Stipend

Postby forecast8 » Wed Mar 12, 2008 5:02 pm

Excellent point. Of course situations vary so check your own situation carefully.

If you are like me, married with 3 kids and a non working spouse, no program has offered me enough that I would pay any income tax, but I would pay FICA and Medicad since those are a flat percent for everyone.

marten
Posts: 134
Joined: Thu Aug 30, 2007 10:21 am

Re: Income Tax on Stipend

Postby marten » Wed Mar 12, 2008 5:06 pm

Holy crap, I can't imagine grad school married with 3 kids. You must be incredibly hard working and have a very supportive family. Good luck,

Marten

forecast8 wrote:Excellent point. Of course situations vary so check your own situation carefully.

If you are like me, married with 3 kids and a non working spouse, no program has offered me enough that I would pay any income tax, but I would pay FICA and Medicad since those are a flat percent for everyone.




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