Don't Go to Grad School

[Jenaimarr]



Stipends are taxable income.. and it would have been illegal for you to deduct tuition. At least that's my understanding.

$26k seems generous. Depends on program, lab, etc obviously but most RA were receiving $22k or less, some TA were probably getting less than $20k.

We had some foreign postdocs and their pay wasn't so bad because they were tax exempt for 2 years. No taxes here no taxes back home.

There was a foreign grad student who cost more than an experienced postdoc because of his tuition. Thinking about it that way, grad students have a good deal. They can earn a Ph.D. with tuition and living expenses covered while quite frankly not contributing a whole lot yet requiring a lot of time for mentoring.

According to my CPA the taxable income was somewhat nebulous depending on the source of funds. If you received your stipend through university payroll you were taxed. If you had your own grant funding from either a federal instution (NIH, etc) or a private non-profit organization with tax exemption status it wasn't taxed. Social security and all the little bits were withheld from your paycheck but income tax wasn't.

Yes, I believe deducting tuition you personally didn't pay out of pocket is technically illegal but since my advisor wasn't taking the deduction on her end, my CPA told me just to take it since it wouldn't be flagged for audit since the 1098T matched up with only one deduction. Everyone I knew took this deduction and no graduate student to date I know of has ever been audited.

Foreign graduate students pay (or their advisors pay) out of state tuition fees at UC schools so they are particularly expensive.

I believe the tuition fees for the foreign students are reduced after advancement to candidacy/qualification exams so the foreign kids were always pushed by their advisors to get it done as quickly as possible within their 1st or 2nd year of grad school. For state resident students like me it didn't really matter so I did my qualifications, midstream, and final thesis defense all within the last 6 months of grad school.

 

[AlexE]

Going to grad school and getting an engineering PhD was an excellent decision in my case. It was rewarding both intellectually and economically. I would recommend it to anyone who is truly interested in his/her scientific field and (based on an honest self-assessment) has the talents, knowledge and perseverance required. However, stay away from grad school if you just wanna get your salary up.

 

[Piobaire]



According to my CPA the taxable income was somewhat nebulous depending on the source of funds. If you received your stipend through university payroll you were taxed. If you had your own grant funding from either a federal instution (NIH, etc) or a private non-profit organization with tax exemption status it wasn't taxed. Social security and all the little bits were withheld from your paycheck but income tax wasn't.

Yes, I believe deducting tuition you personally didn't pay out of pocket is technically illegal but since my advisor wasn't taking the deduction on her end, my CPA told me just to take it since it wouldn't be flagged for audit since the 1098T matched up with only one deduction. Everyone I knew took this deduction and no graduate student to date I know of has ever been audited.

Foreign graduate students pay (or their advisors pay) out of state tuition fees at UC schools so they are particularly expensive.

I believe the tuition fees for the foreign students are reduced after advancement to candidacy/qualification exams so the foreign kids were always pushed by their advisors to get it done as quickly as possible within their 1st or 2nd year of grad school. For state resident students like me it didn't really matter so I did my qualifications, midstream, and final thesis defense all within the last 6 months of grad school.

This just doesn't hang. Income is income, whether it be from a Fortune 50 or a grant from a non-profit. Also, who earns 26k and has their own CPA? And what CPA gives advice that is "technically illegal?"

 

[Jenaimarr]



This just doesn't hang. Income is income, whether it be from a Fortune 50 or a grant from a non-profit. Also, who earns 26k and has their own CPA? And what CPA gives advice that is "technically illegal?"

Shady Chinese CPAs?

I know I can't be alone in my experience, but don't people get tax advice from their accountants/lawyers all the time that are somewhat in the nebulous grey area? I've had experience with fresh CPAs who like to do everything by the book and other experiences with 'seasoned" vets (esp with Big4 audit/IRS backgrounds) who will give the disclaimer that certain deductions are technically "not exactly legal" by the book but because of various factors or whatnot, aren't at high risk for being flagged for audit. The same CPA also provided a sliding scale for how much tax refund you'll get with each method of filing, statute of limitations for audit risk, as well as potential penalty in the off chance of an audit. With this package of given information, they then ask you how you feel about the associated risk and how you want to proceed.

Basically all the private practice Chinese CPAs I've worked with provide this type of service and are highly recommended through the (somewhat insular) community. The ones that are rigid in their rule following, frankly their practices don't last very long since word spreads and us cheapasses will shun them (incidentally a few I know went back again to Big 4 corporate after they closed their own practices).

 

[Piobaire]



Shady Chinese CPAs?

I know I can't be alone in my experience, but don't people get tax advice from their accountants/lawyers all the time that are somewhat in the nebulous grey area? I've had experience with fresh CPAs who like to do everything by the book and other experiences with 'seasoned" vets (esp with Big4 audit/IRS backgrounds) who will give the disclaimer that certain deductions are technically "not exactly legal" by the book but because of various factors or whatnot, aren't at high risk for being flagged for audit. The same CPA also provided a sliding scale for how much tax refund you'll get with each method of filing, statute of limitations for audit risk, as well as potential penalty in the off chance of an audit. With this package of given information, they then ask you how you feel about the associated risk and how you want to proceed.

Basically all the private practice Chinese CPAs I've worked with provide this type of service and are highly recommended through the (somewhat insular) community. The ones that are rigid in their rule following, frankly their practices don't last very long since word spreads and us cheapasses will shun them (incidentally a few I know went back again to Big 4 corporate after they closed their own practices).

In my experience, people that earn 26k do not hire former Big 4 CPAs to do their taxes. That's the major part of what doesn't hang. And the thought a person earning 26k has a host of deductions, let alone questionable ones, is odd. And then to have an audit risk assessment? On 26k? Not buying it.

 

[Jenaimarr]



In my experience, people that earn 26k do not hire former Big 4 CPAs to do their taxes. That's the major part of what doesn't hang. And the thought a person earning 26k has a host of deductions, let alone questionable ones, is odd. And then to have an audit risk assessment? On 26k? Not buying it.

How hard is it to pay an accountant $150 a year to file your taxes? I'm sure it would've been cheaper to go to H&R block but why wouldn't I use the same person that has been doing my family's various taxes for going on 2 decades?

Granted it's not some joe schmoe who I just looked up in the yellow pages, though if you actually look in the Chinese yellow pages, most private practice accountants make it a major point to advertise their pedigree. Most of my friends who currently work big4 and hate their jobs are doing it for the resume/name recognition when they open their own practice).

- I see your point though... most people (I'm guessing the majority of those making 26k) probably don't have a long standing relationship with their accountant.

 

[Piobaire]

I would be willing to bet 99% of people making 26k file an EZ form. Pays to have family connections. Btw, now you've gone from a CPA with a 20 year famiy connection from having experience with a host of CPAs, from fresh faces to seasoned pros.

 

[HomerJ]



I know I can't be alone in my experience, but don't people get tax advice from their accountants/lawyers all the time that are somewhat in the nebulous grey area?

I don't know. Don't have an accountant or lawyer. But what we've been talking about is black and white.

 

[HgaleK]



I would be willing to bet 99% of people making 26k file an EZ form. Pays to have family connections. Btw, now you've gone from a CPA with a 20 year famiy connection from having experience with a host of CPAs, from fresh faces to seasoned pros.

^If he comes from money or he went to business school, none of that is out of the question.

I know I can't be alone in my experience, but don't people get tax advice from their accountants/lawyers all the time that are somewhat in the nebulous grey area?

I don't think anyone immediately gives out grey area advice. I'm sure you can request that they toe the line a bit, but it would be a terrible idea to just hand out advice that might get you in serious trouble. Probably illegal too...

 

[Jenaimarr]



^If he comes from money or he went to business school, none of that is out of the question.

Sort of yes and sort of yes.

Family has run several types of businesses from small retail and restaurants back in the day to (currently) large semi-conductor manufacturing companies. Couple that with real estate holdings and various family trusts and our use of accountants has been pretty extensive.

Sister is a tax cpa at a top 5 large local (turned down offers from IRS and KPMG), ex-gf was large local then PWC audit, several friends at other big4 (big5 back in the day) are/were in tax/audit.

Wife is a b-school grad so we have tons of other friends in big4, and while I didn't attend b-school, during my science ph.d studies I worked closely with the bschool dept (I had an undergrad minor in management/accounting).

I believe this somewhat qualifies my statement of experience with a litany of cpas from newbies to big4.

 

[CTGuy]



FWIW, Harvard is not the most selective undergraduate college. A couple service academies, Julliard, and Cooper Union were more selective last time I saw.

Also not considered the most rigorous academically.

 

[scientific]

^just curious which do you think is the most rigorous?

 

[edinatlanta]



^just curious which do you think is the most rigorous?

There was one school I was reading about in California, all-male, I think 2 year only where in addition to something like 20 credit hours a semester they also had to work the ranch full time too and study full time. Something like that. Anyway, article said it was the most rigorous. Also, I'd put something like St. John's up there where all you are doing is reading the classics. that seems like it would be really difficult to successfully do.

 

[Jenaimarr]



There was one school I was reading about in California, all-male, I think 2 year only where in addition to something like 20 credit hours a semester they also had to work the ranch full time too and study full time. Something like that. Anyway, article said it was the most rigorous.

Deep Springs College?
http://en.wikipedia.org/wiki/Deep_Springs_College

 

[cam]

Rigor is a small factor in prestige.