Graduate Student Stipend

[c09827]

I'm a graduate student receiving a monthly stipend. I used the 1040-ES form to estimate my taxes, but noticed that this form also assumes that it's "self-employed". I had been told that graduate student stipends are not "self-employed" so do I still need to pay the self-employed taxes? Or can I pay the estimated taxes of just the yearly income bracket I'm in?

[VolvoGirl]

Estimated tax payments are not just for self employment taxes.  But for any income that doesn't have withholding taken out like interest and dividends.  

[c09827]

I see. So for example, I learned that to calculate quarterly taxes you do income tax + self-employment taxes. So let's say I have ~10k for my AGI this quarter, and so my income tax would be ~12% of that for 2024. Then self-employment taxes are AGI*92.35%, then that number multiplied by 15.35%. 

In this case, income tax is about $1200 and self-employment tax is $141. 

As someone not self-employed (was told graduate students are given fellowships/scholarships which are not the same as self-employment), would I be filing $1200 or $1341?

See: https://pfforphds.com/weird-tax-situations-fellowship-recipients/

[VolvoGirl]

No you don't pay the 15% self employment tax if you are not self employed.  Just the regular income tax on it.  So just the 1200.  But you first subtract the Standard Deduction  from the AGI to get your Taxable Income.  The Standard Deduction for Single is $14,600.  So you might not owe any tax at all.  

[c09827]

How does standard deductions work for quarterly? since my income is ~40k a year but I'm calculating for just this quarter, do I even deduct?

[DashonnonH]

Hi, there are two things to consider with Stipends:

1. Is the stipend taxable?

2. Is the stipend considered self-employment subject to self-employment taxes?

Taxable Stipend?

Stipends are taxable depending on what they are used for.  If the stipend is used for qualified education expenses, you would not have pay taxes on any amount used for those qualified education expenses. 

If the stipend is used to pay room and board or other expenses, then the stipend is taxable. 

Self-Employed?

If you received a stipend that is related to education, fellowship/internship, etc., and if it’s considered taxable income, then you will need to report it on your tax return as scholarships and grants. 

If your stipend is in conjunction to performing duties, such as clerical work, research, etc., then the payment is considered self-employment income, and this will need to be reported on a Schedule C instead.

The link below provides additional information

https://turbotax.intuit.com/tax-tips/college-and-education/taxes-for-grads-do-scholarships-count-as-...

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