[net.taxes] Graduate Student Stipends

wjm@lcuxc.UUCP (B. Mitchell) (03/01/85)

In the United States, scholarships and other stipends are generalkly exempt from Federal
Income Tax (and therefore from most state income taxes) IF they are outright
grants (such as scholarships and fellowships) or if they are payment for
work that is REQUIRED for your degree requirements.  Therefore, if you
are required to complete a thesis for your degree a research assistantship
for your thesis project is not taxable income.  However, since most grad
students are NOT required to teach to get their degrees (although education
majors may be an exception), most teaching assistantships are taxable income.
Check with the financial aid office at your school - they can tell you
what part of your stipend is and isn't taxable.
Also get the IRS publication on "Educational Expenses" or "Income".  I don't
remember the number - you can also get Publication 17 "Your Federal Income
Tax" from the IRS, which covers all aspects of US Federal Income Tax and
cross references these other publications.
The best part of these is that they are official IRS information, and are FREE
for the asking from the IRS
Regards,
Bill Mitchell ({ihnp4!}lcuxc!wjm)

luner@uwai.UUCP (03/18/85)

<><><><><>

Question: If my (I know to be taxable) assistantship requires my to pay
tuition, is that amount for tuition deductible if I itemize? 

I'd like to know if anyone has tried this and what happend to them. 

									/David

brett@ucla-cs.UUCP (03/26/85)

> 
> <><><><><>
> 
> Question: If my (I know to be taxable) assistantship requires my to pay
> tuition, is that amount for tuition deductible if I itemize? 
> 
> I'd like to know if anyone has tried this and what happend to them. 
> 
> 									/David

Good point.  Here is what my book says:

"You may deduct the ordinary and necessary expenses you have for
education, even though the education may lead to a degree, if the
education:

	Is required by your employer(YES IT IS IN YOUR CASE), or
by law or regulations, for keeping your salary, or job, if the
requirements are for a business purpose(ARE THEY?); or

	Maintains or improves skills required in doing your
present work"


You may NOT deduct your expenses if the education is:

	Required to meet the minimum educational requirements
of your work

	Part of a program that will qualify you for a new trade
or business
--------
Examples:

Educational expenses and expenses for travel, meals and lodging
to obtain doctorate were deductible for a professor.  Degree wasn't
required to meed mimimum education requirements for employment.

(PRESUMABLY HE/SHE WAS AT A SCHOOL WHERE BEING A PROF. DIDNT NEED A P.hD.)


I dont really know the answer, but I presume the IRS
thinks you cant.  Maybe if you told us more about your current career
and your career goals, a definite answer could be given.  Without
this, I expect your expenses are part of a program that will qualify you for 
a new trade or business - and thus are not deductible.




-- 
Brett Fleisch
University of California Los Angeles
3804 Boelter Hall
Los Angeles, CA 90024
Phone: (213) 825-2756, (213) 474-5317 

brett@ucla-cs.ARPA or
...!{cepu, ihnp4, trwspp, ucbvax}!ucla-cs!brett
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lwe3207@acf4.UUCP (Lars Warren Ericson) (03/28/85)

New York University interprets graduate teaching and research assistantships
to be non-taxable.  The payroll department does not withhold; if they do
so by accident (often happens at the beginning of the year), they can be
told to stop, and the IRS will return the withheld amound at tax time.  The
key point is that all assistants are required to work 10 hours/work, and
this is considered part of the educational process.  Given that distinction,
the Federal regulation is that it is equivalent to a scholarship or
fellowship, and is non-taxable.

You are probably paying taxes for nothing, unless your graduate program
hires very few assistants and they are paying you something like a living
wage (>$14K) instead of the $6K-$9K usual for assistantships.

Lars Ericson
NYU