How much tax do I pay?
Just because most MD Phd students don’t receive W2 or 1099 forms from their university (and therefore don’t have income reported to the IRS), doesn’t get you off the hook for paying taxes. As of 1986, graduate stipends are taxable. In the US, individuals are responsible for calculating and paying their taxes.
- Summary points:
- All income beyond your tuition and fees is income and is taxed
- If you’re single and take a standard deduction, all income over ~$8k is taxable
- It’s your responsiblity to pay estimated taxes each quarter to the IRS
- During your PhD, your mentor’s grant often pays your salary. When this happens, you’re a compensated employee, you get a W2, some of your taxes will be withheld by the university…just like a regular job
- Generally, you can exclude income used for fees, books, supplies, and equipment required for your courses
- Room & board is not deductable (except in Oregon, see ORS 316.846)
- Some students work with an accountant the first year to maximize deductions while minimizing risk. This may cost a few hundred bucks.
- Some students create a potential liability for themselves by not filing a return; this is not advised unless otherwise told by your personal tax advisor.
Disclaimer: we’re not tax experts; we’re not accounting students. Everyone’s situation is different. Consult your tax advisor. Thanks
Supplemental loans for MD/PhD Students
Because the MD/PhD stipend offered by the NIH at participating MSTP programs is designed to meet your financial need, it is usually difficult to find need-based scholarships to cover additional family obligations for students with families and those carrying personal debt.
But this is the great US of A, and with a strong earning potential in front of you banks would love to loan you money. The downside is that your loans will begin accruing interest throughout your residency, if not immediately. We recommend talking with your financial aide office about private loan information that may meet your personal circumstance before heading out to the regular market.
NRSA NIH Fellowship
One avenue to increase your stipend during some of your PhD years and your final years as a medical student is through a NIH F30 fellowship. The prestigous fellowships, often called an “F30” or “NRSA grant”, provide an opportunity to fund your research. Importantly, they also provide an additional $3,000 stipend payment (may vary slightly across universities). F30 program is specifically designed to support training in an accredited, combined MD/PhD program.
- More info on the NIH site for (formal grant title): Ruth L. Kirschstein National Research Service Awards for Individual Predoctoral MD/PhD Fellows (F30)
- NRSA Application checklist (PDF) from UIUC.
- Strategic Planning for Grant Funding for MD/PhDs (PPT) from Emory.
- NRSA Fellowship Guide from U. Wisconsin
Other Things to Keep in Mind
- The NIH has a loan repayment program to encourage clinicians to enter research programs. In exchange for a two-year commitment to your clinical research career, NIH will repay up to $35,000 per year of your qualified educational debt, pay an additional 39% of the repayments to cover your Federal taxes, and may reimburse state taxes that result from these payments. See http://www.lrp.nih.gov/ for more info.