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SL2College • View topic - What kind of tax burden to expect
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What kind of tax burden to expect

Questions relating to housing and living

What kind of tax burden to expect

Postby suranga.costa » Sat Aug 31, 2013 5:07 pm

Hi,

This may be a bit off topic, but I hope someone would be able to advise. I'm on a graduate assistantship, so naturally cash is tight. However, I'm hearing a lot of horror stories about our monthly allowances being taxed. Some say the tax rate can be as high as 15% !
Since I'm yet to be paid, I don't know how much I would be taxed, and I would prefer to have a Lankan break it to me gently over this forum rather than having a heart attack later this week in public :-)

Please advise :-)
suranga.costa
 
Posts: 11
Joined: Wed Apr 10, 2013 10:57 pm

Re: What kind of tax burden to expect

Postby sam » Sun Sep 01, 2013 8:14 pm

It depends on which state you are and what sort of withholding rates in your file. Some states have state income tax in addition to the federal tax withholding. Also as an international student for the first few years you are a nonresident alien for tax purposes so you are mostly exempt from Medicare and Social Security tax. So you basically will see only withholding tax in your pay stub. Remember, there may be some higher income tax rate for withholding, but you almost always get most out of it when it times to file your tax :) get your tax return. At least for your first several years as a student.

Tax is a delicate and complex process. So its always not the same, things are different in different states, and also lots of variables comes into play.

But I say this, it will be somewhere in the 10% of your Gross Income. I just checked mine, its 10.275% from the gross pay every month. So, don't worry too much about this withholding tax, and as I said before, you are gonna get whatever the total withholding tax next year when you file for tax. For the much of our surprise, we used to get more than what was withheld from us till several years back, but after we get into a certain point (after about 5 years in US) where we are now considered resident alien for tax purposes (even though we are still nonresidents for other purposes :) ) we have to pay some of our withholding for the tax.

Hope this helps.
sam
 
Posts: 477
Joined: Fri Aug 08, 2008 1:08 am
Location: College Station, Texas

Re: What kind of tax burden to expect

Postby suranga.costa » Wed Sep 04, 2013 1:14 pm

Thanks Sam, it was certainly very helpful :-)

Um.. when you said "...For the much of our surprise, we used to get more than what was withheld from us till several years back..." did you mean that the government paid you back more than what it claimed from you ? wow :-)
suranga.costa
 
Posts: 11
Joined: Wed Apr 10, 2013 10:57 pm

Re: What kind of tax burden to expect

Postby sam » Wed Sep 04, 2013 5:56 pm

Yes, I remember there was $300 per each person economic hardship credit or something couple of years ago. Also when you have kids, you get about $1000 child tax credit which basically comes as tax return. Also depends on different tax provisions, you can sometimes claim buying stuff for educational purposes like Laptops etc. Also there's educational credits for paying tuition etc.

But at least you should get total tax withheld as a return for the first few years.
sam
 
Posts: 477
Joined: Fri Aug 08, 2008 1:08 am
Location: College Station, Texas


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