kanishka Posted March 18, 2007 Share Posted March 18, 2007 One of my profs told me that R.A's need to pay a flat 25% of their stipend as taxes. :crazy: Can anyone let me know how exactly taxes are calculated? A flat 25% appears quite a bit - even though I'm recieving what I think is a fairly generous offer from Maryland AREC (20K/yr, with tuition and mediacal insurance) - this translates roughly to something under 1700 $/month; 25% of this is 425$, so i'm guessing i'll have to pay something close to 400$ as taxes alone. If I include rent (~500$) and additional misc expenses (food, phone, etc) of about 150$, this means I get 1700 - 500 - 400 - 150 = 650$ as saving. (Actually the net amount will be a little less than 650$).:eek: And I'm being a little conservative (I think) in my expenditure. I also imagine that taxes are calculated differently in different states... Anyway if there are any graduate students preferably somewhere in Maryland, could you please let me know exactly how the taxes are carried out? Thank you. Quote Link to comment Share on other sites More sharing options...
kveldulfur Posted March 18, 2007 Share Posted March 18, 2007 1. I think I paid around 10% of my RA in Maryland. I might be mis-remembering but I'm pretty sure it's not as high as 25% flat. 2. You'll have to develop a way to photosynthezise energy from the sun, I think, if you're going to try to live on 150$/month. 1 Quote Link to comment Share on other sites More sharing options...
stupidolive Posted March 18, 2007 Share Posted March 18, 2007 as an intl student here at the US undergrad, I pay tax based on the 1024EZ for single and they have a chart of tax brackets based on my earning from on-campus jobs. So stipend is different? I know that my grant from the school was taxed 31% :D Quote Link to comment Share on other sites More sharing options...
kartelite Posted March 18, 2007 Share Posted March 18, 2007 $150 a month for food + misc? I spend that much a week at least. Transportation, clothes, random things really add up. Especially at Maryland, unless you are just going to eat cereal 3 times a day, you'll be spending a lot more than that. Plus, don't worry about "saving" yet. Most people are taking out huge loans to go to school, I doubt any grad students who are getting less than $30k a year are putting away that sort of money. And why would there be a flat tax of 25%? That's just not how taxes work, you pay federal and state taxes, but there are sizeable deductions on both, and state taxes are a pretty nominal rate. I also believe grad student stipends are exempt from FICA. Quote Link to comment Share on other sites More sharing options...
saphire Posted March 18, 2007 Share Posted March 18, 2007 I have also same concern about taxes. I am admitted to UMD and got a graduate assistantship with 15.5k stipend, tuition waiver and medical insurance. how much tax will I pay? Any opinions? Quote Link to comment Share on other sites More sharing options...
Prometheus_Econ Posted March 18, 2007 Share Posted March 18, 2007 I've asked a similar question a while ago and got some very valuable feedback from Tax-Wizard Jhai. Here is the thread: http://www.www.urch.com/forums/phd-economics/64131-how-much-stipends-taxed.html Quote Link to comment Share on other sites More sharing options...
nauru Posted March 18, 2007 Share Posted March 18, 2007 My sis got her American tuition waiver taxed by the Canadian government as part of her "income." To this day I have insisted that she should not have paid that tax, but she says that's the rule. Who is right? Is Canada really that backwards? Quote Link to comment Share on other sites More sharing options...
Tragically Hip Posted March 18, 2007 Share Posted March 18, 2007 I believe that it would've been taxable income, but there was an equivalent deduction for educational expenses paid, so the net effect should be that there wouldn't be a tax outlay on it. This year though, the Canadian Revenue Agency changed the policies regarding fellowships and scholarships, making them non-taxable income, assuming that they're for programs that warrant educational deductions; it's definitely a student-friendly change. Quote Link to comment Share on other sites More sharing options...
Jhai Posted March 19, 2007 Share Posted March 19, 2007 $150 a month for food + misc? I spend that much a week at least. Transportation, clothes, random things really add up. Especially at Maryland, unless you are just going to eat cereal 3 times a day, you'll be spending a lot more than that. I'm not sure about transportation costs (since they vary so much from place to place), but if it's possible to live in the Bay Area on $150 a month for food and miscellaneous items - and it is -, then it's possible anywhere. You can even eat pretty well with that much. Buy cheap types of food in bulk - if you spice it well, even ramen taste good. Add in some beans and frozen vegetables and you have a pretty healthy, balanced meal. Get the "lower quality" version of different foods: chicken thighs instead of boneless chicken breasts, off-brands instead of the name brands. Farmer's markets for fresh produce, so you don't get scurvy - in California, at least, you can get a huge tray of strawberries for less than $5. When you eat out - which should be rare-, opt for cheaper buffets or find the cheap ethnic restaurants - in the Bay Area I can get a very filling meal of pho noodles for two people for less than $6. Pack a lunch instead of eating out. Whenever you buy something (especially clothes, cds, and the like), ask if yourself if you really need it, or if it's just a want There's a lot of web sites that give advice for living cheaply. It's not that hard, but the initial push to change one's habits can be tough. That being said, smooth lifetime consumption functions are nice. I certainly wouldn't try to save anything more than a few hundred dollars for an emergency fund (car breaks down, unexpected hospital visit, etc). Quote Link to comment Share on other sites More sharing options...
Prometheus_Econ Posted March 19, 2007 Share Posted March 19, 2007 Wow, Jhai, you really know how to get by with very little money :). In my budget, food accounts for the highest percentage of costs because I go for pretty high quality food because I really taste the difference when getting stuff from Wild Oats or Whole Foods instead of - say - Safeway. Quote Link to comment Share on other sites More sharing options...
kartelite Posted March 19, 2007 Share Posted March 19, 2007 Well, $150 a month is just under $5 a day. So unless you are planning on eating nothing but those strawberries all day...:) I probably spend $400-500 per month on food myself. I usually try to buy stuff that's on sale but I feel that food is something I shouldn't be reluctant to splurge a bit on from time to time. For example I always buy Coors Lite or Yuengling instead of Natty. Sometimes even higher end stuff when I've just gotten paid. ;) Plus I need to go to all you can eat sushi buffets a couple times a month... Quote Link to comment Share on other sites More sharing options...
Jhai Posted March 19, 2007 Share Posted March 19, 2007 Wow, Jhai, you really know how to get by with very little money :). In my budget, food accounts for the highest percentage of costs because I go for pretty high quality food because I really taste the difference when getting stuff from Wild Oats or Whole Foods instead of - say - Safeway. It's 'cause I'm lazy. ;) I only do a bit of tutoring during the school year - no major jobs, and my parents no longer support me, so I've learned to get by on whatever I earned during the summer + the board stipend I get from my undergrad. Also, I'm out in the middle of nowhere, Indiana right now. If there was a Trader's Joe close by, things might be a bit different. I do tend to splurge on a few items (like my wonderful German muesli cereal & good spices) Quote Link to comment Share on other sites More sharing options...
kanishka Posted March 19, 2007 Author Share Posted March 19, 2007 Hmmm so there is a fair amount of misinformation floating around in my graduate school... I should add I'm from India. Apparently, India has some kind of treaty with the US which would mean I dont pay tax. I dont believe this because all my seniors and my brother pay tax. They are all on graduate assistantships. And they all do save money, in fact, my brother (who was getting less money than I am, but he was staying in Atlanta) actually saved up more in one year than I did when I was working for GE with their hideous salary. I should also clarify that I'm on a graduate assistantship. It seems that there is a progressive income tax structure, which is a relief. I was kind of surprised at a 25% flat rate. :rolleyes: I'll email the secretary to find out more. Thank you, everyone. This is why I majored in econ, and not accounting. exactly! I was told - if you cook most of the time - that food doesn't go above a 100$ a month...in fact there is a website too (of the Indian Students Council at Maryland) that professes the same. Maybe with an odd hour of photosynthesising here and there. :) I suppose another way of looking at it is - is ~1700 $ a month enough to live on in Maryland? Comfortably? Quote Link to comment Share on other sites More sharing options...
Peter137 Posted March 19, 2007 Share Posted March 19, 2007 Hmmm so there is a fair amount of misinformation floating around in my graduate school... I should add I'm from India. Apparently, India has some kind of treaty with the US which would mean I dont pay tax. I dont believe this because all my seniors and my brother pay tax. They are all on graduate assistantships. And they all do save money, in fact, my brother (who was getting less money than I am, but he was staying in Atlanta) actually saved up more in one year than I did when I was working for GE with their hideous salary. I should also clarify that I'm on a graduate assistantship. It seems that there is a progressive income tax structure, which is a relief. I was kind of surprised at a 25% flat rate. :rolleyes: I'll email the secretary to find out more. Thank you, everyone. exactly! I was told - if you cook most of the time - that food doesn't go above a 100$ a month...in fact there is a website too (of the Indian Students Council at Maryland) that professes the same. Maybe with an odd hour of photosynthesising here and there. :) I suppose another way of looking at it is - is ~1700 $ a month enough to live on in Maryland? Comfortably? Why do you want to put aside money from this little salary? You are young you have some free time, travel, eat out enjoy your life! When you get a well paid job you can save more in a half year than thorough you graduate studies. Yes 20000 minus taxes is enough to live on I have the same amount and get around 17000 a year after taxes, health insurance and dental (You have to pay a little bit for health insurance 20 dollars or so)(My country doesn't have any kind of tax treaty). That is about 1400 a month I can pay food clothing car insurance, gas, housing. Get a car and go to NY, Philadelphia, the mountains don't sit on your bottom for 5 years because that is what many students do (just to save that little litte money). If you really live miserably and don't go anywhere, eat rice all day, don't buy clothes you may put aside 5000 a year, is that worth it:whistle: ? I DON'T THINK SO!:rolleyes: Quote Link to comment Share on other sites More sharing options...
kanishka Posted March 19, 2007 Author Share Posted March 19, 2007 I've been told I won't have much free time as a graduate student? And, umm, relax. I dont plan on being a monk or anything. I just want to get some kind of estimate as to how much money I could possibly save - I do have my family back here and am trying to figure out how often I could come back home. Believe me, I'd love to spend as much time travelling and eating out as I could. There are other constraints on expenditure and man do they bind!:doh: And last - I'm going off topic now - what if someone LIKED eating rice all day and hanging around at home? :hmm: But its nice to know the money is a comfortable amount. :tup: Quote Link to comment Share on other sites More sharing options...
mosfro Posted March 19, 2007 Share Posted March 19, 2007 i particularly like rice as well, daal is great too but the eating fast food genrally takes over in grad life, i didnt find myself with too much time to cook, except for the occasional biriyani on teh weekends go indian food! Quote Link to comment Share on other sites More sharing options...
Peter137 Posted March 19, 2007 Share Posted March 19, 2007 I've been told I won't have much free time as a graduate student? And last - I'm going off topic now - what if someone LIKED eating rice all day and hanging around at home? :hmm: Frankly I pity those how find such a lifestyle satisfying I never understood them:D . How can you be creative if you don't get any stimulus? What I mean is hiking, walking, cycling, traveling visiting museums etc. to get to know this beautiful country you come to live in. (not parying or drinking) I do have some free time. By the way I am not an economics student. Quote Link to comment Share on other sites More sharing options...
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