I receive a stipend every semester, and none of it is taxable.
I also received a stipend over the summer, and it wasn't taxable.
Its not terrible because you claim the standard deduction for 5 k. The next 7 k is taxed at 10% and the rest will most likely be taxed at 15%. In addition, I understand that there is no withholding, meaning you can use and earn interest on the money before paying it to the government as late as possible. You don't need to pay social security or medicare as I understand it but I could be wrong. This is just federal of course but state shouldn't be bad.
Your federal tax rate should be about 10% or less depending on the value of your stipend.
I think maybe it depends on the type of stipend. In my MS program, I'm on both a fellowship and an assistantship, both of which pay a stipend. The fellowship stipend is not taxed, while the assistantship stipend is. Taxes are witheld from the assistantship stipend, but not for social security. I suppose the assistantship stipend is treated differently because I have to work for it.
You are not taxed on educational expenses - so you could potentially write-off money spent on books, software you purchase, money you spend on conference trips, etc. You have to pay taxes on all income used for room & board type expenses. It's suggested that most graduate students file taxes on a quarterly basis, so you don't have to pay a huge chunk of money come April.
Edit: by "taxed" I mean what you have to pay taxes on. Many, maybe even most stipends don't automatically deduct social security, medicare, etc, out of your paycheck. So you have to pay a whole lot on/before April 15th when you file taxes. For instance, I have a full ride scholarship at my undergraduate university. The part that goes towards paying tuition and some (not all) fees I do not have to declare as income, and thus I never pay taxes on it. The part that I use to pay for my room & board I must declare as income, and I must pay taxes on every spring. However, this money doesn't have any of the automatic deductions on it (social security and the like) that most paychecks do. So if I get, say $1000 to pay for my room, I have to pay more taxes on that in April then someone who brought home $1000 from their job, but had their taxes automatically deducted (because, in reality, they earned, say, $1200, and then the $200 was taken out for taxes).
a lot of countries have tax treaties with the US. but these usually put an upper bar of 5k and anything above 5k is taxed. and its for a certain period of time.
as an international, there is only a standard deduction and no personal/education/state and local tax/etc deduction allowed.
in most cases, if you stay in the us for 5 yrs, after that you loose your benefit of the tax treaty with your home country and file as an american with a 1040-ez or whatever. then you can start claiming all kinds of neat deductions....
actually, i think if you file a 1040EZ or 1040A then you can only take the standard deduction. If you can come up with itemized deductions over I think ~8K, however, then you should file plain 1040 and do that. hopefully, learning PHD level economics will help our creativity in thinking up 8K in deductions...
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