Taxes in US relevant to a student

Knowing your Tax obligation will enable you to get a better hold on your spending.
Two types of taxes are imposed in US namely 1) Federal Tax and 2) State Tax.
All taxes discussed here are applicable under Federal Tax laws. State Taxes differ from state to state.



Following guidelines are applicable to US tax rules/system:

1) Tuition Fee Waiver
Tuition fee waiver is not taxable (Fellowships award often comprises a tuition fee waiver component which is not taxable under US tax rules)

2) Stipends for Fellowships:
Stipends - Fellowship awards comprises another component called stipends ( also referred as "maintenance allowance") is considered taxable in income and is taxable under federal laws. Check http://www.irs.gov/individuals/index.html to see more details.
For international students 14% of the stipend is deducted at the source as tax and reported to IRS automatically. International students need not file a tax return as the tax is already deducted from the stipend. For US Citizens and permanent residents this tax is not deducted and are required to file tax returns (Deadline for filing tax returns : 15 April) and can pay quarterly tax payments to IRS.

3) Stipends for teaching/research (TA and RA stipends)
Stipends given for teaching/research assistantship are taxable.For international students the rate of tax is determined by the information given in IRS form W-4 (filled in during student's registration at the University) and is deducted at the source as tax and reported to IRS automatically. International students need not file a tax return as the tax is already deducted from the stipend. Same rules apply for US citizens and permanent citizens.

4) Hourly Employment wages (in the case of partial assistantships)
Hourly Employment wages are taxable under federal tax law

5) Social Security Tax
Social Security Tax is only deducted if a student is working as a TA/RA (Teaching/Research Assistant) and is working during summer months. Social Security Tax is not deducted during rest of the year for TAs/RAs. For Fellowship students, no Social Security Tax is deducted at any situation (i.e even during summer months)

6) Travel Funds
Students receiving funds for traveling is not taxable only when the travel is related to the university business (like attending conferences etc..,)

Summary:

For International Students:

Type of Fund	Tax Paid by Students ?	Withheld at the source?	Students need to report?
Tuition Waiver	No	Yes	No
Fellowship Stipend	Yes (Taxed at 14%)	Yes	No
RA/TA Assitantships or Stipends during Masters course	Yes (Tax rate as determined by W-4 form)	Yes	No
Hourly Wages	Yes (Tax rate as determined by W-4 form)	Yes	No
Travel Fund- on University business	No	No	No
Travel Fund - non University business	Yes (Taxed at 14%)	Yes	No

For US Citizens and Permanent Residents:

Type of Fund	Paid by Students ?	Withheld at the source?	Students need to report?
Tuition Waiver	No	No	No
Fellowship Stipend	Yes ( Tax rate as determined by W-4 Form)	No	Yes
RA/TA Assitantships or Stipends during Masters course	Yes ( Tax rate as determined by W-4 Form)	Yes	No
Hourly Wages	Yes ( Tax rate as determined by W-4 Form)	Yes	No
Travel Fund- on University business	No	No	No
Travel Fund - non University business	Yes ( Tax rate as determined by W-4 Form)	Yes	No