Tax help?

[eLiu]

Hi all,
I'll be going to graduate school on a fellowship. They pay the tuition directly & I get a stipend (~32k/yr). I believe this stipend is taxed, but I don't know how to classify it. The people awarding the gift explicitly state that they will offer 0 tax advice (i guess it's a liability thing?), so I was hoping that some folks on ATOT would have some advice/experience...

So here are some questions:
1) Do I even have to pay taxes/social security/medicare?

I'm pretty sure I do, so:
2) I recall reading that the fellowship payments don't withhold anything. If that's the case, how do I handle social security & medicare?

3) What does the fellowship file under? Is it a job? A gift? Can I even use the 1040EZ? I have no idea. Whatever I file as, do you guys know roughly what percentage I'll be paying?

4) Did you have to file state (MA) income taxes?

Thanks for the help,
-Eric

 

[Xcobra]

"If you received a scholarship or fellowship, all or part of it may be taxable, even if you did not receive a Form W-2. Generally, the entire amount is taxable if you are not a candidate for a degree.

If you are a candidate for a degree, you generally can exclude from income that part of the grant used for:

* Tuition and fees required for enrollment or attendance, or
* Fees, books, supplies, and equipment required for your courses.

You cannot exclude from income any part of the grant used for other purposes, such as room and board."

Given that you will not use it for the above, I'm sure you only get taxed on it like ordinary income. It's almost like work study, I think. If you have no other significant income sources and don't itemize, you can use the 1040EZ. I am not sure if these are taxable in MA, anyone help?