PhD/PsyD How are Internship Stipends Taxed + Other Expenditures?

[attitudelikeasunrise]

I will be starting my internship next month and am trying to figure out a tentative budget for the next year. I am a little bit confused about how stipends are taxed, as well as other potential costs that may be removed from your paycheck (e.g. health insurance). My main questions are:

1. Are stipends taxed similarly to any regular income and just based upon the tax rates of the state?
2. Are there any differences in how stipends are taxed depending on internship setting (i.e. VA, AMC, CMHC etc.)?
3. What is a general estimate of how much you will be paying for health insurance through your internship employer? Are we talking like $1,000/yr or more like $5,000/yr (or something completely different)?
4. Can somebody give me a rudimentary estimate of what the actual monthly take-home pay would be if, for example, you were working at a VA in Kansas with a yearly stipend of $28,000 (this is hypothetical)?

Thanks for any input!

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[StellaB]

It’s just income, and taxed as such. Your tax rate and take home pay will be based on your own withholdings, there are online calculators to figure this out. How much you have to put toward your health insurance is based on the plan you select, but maybe some VA people can give you a better idea of the amount to expect.

 

[ClinicalABA]

4. Can somebody give me a rudimentary estimate of what the actual monthly take-home pay would be if, for example, you were working at a VA in Kansas with a yearly stipend of $28,000 (this is hypothetical)?

As a sole source of income, filing as unmarried, I'd plan on that translating to ~1600-1800 per month (less if health insurance is expensive).

 

[AcronymAllergy]

As StellaB said, internship stipend is taxed as standard income, and take home pay can vary widely based on your different withholdings and deductions (e.g., if you contribute to a 401k). Insurance can also vary fairly substantially. If you're the only insured and it's a decent rate, I'd say maybe $140-160/month; others can of course chime in based on their experiences.

Overall, ClinicalABA's estimate of ~1600-1800/month for a hypothetical $28k stipend sounds right to me. I'd probably plan more for the 1600 end, or even 1500 if you want to be conservative (or if you're planning on making retirement contributions).

 

[ClinicalABA]

Just to keep things in perspective, that measly 28K is almost double the federal minimum wage for a full-time (40 hour/wk) job.

 

[Seven_Costanza]

Just to keep things in perspective, that measly 28K is almost double the federal minimum wage for a full-time (40 hour/wk) job.

That is certainly sobering considering I’ve gotten a second job just to help me make it through internship year. Granted I’ll be living in an expensive part of he country, but I can’t imagine many places where $15k would be a livable wage.

 

[LadyHalcyon]

It's all very sobering

That is certainly sobering considering I’ve gotten a second job just to help me make it through internship year. Granted I’ll be living in an expensive part of he country, but I can’t imagine many places where $15k would be a livable wage.

 

[notfullyfathomd]

FWIW I was able to stay on my school's insurance during my internship year. It was much cheaper that that offered through my internship, and I have a chronic illness so I knew that my (very expensive) medications would be covered.

There are several calculators that will give you a net income estimate and also a few web pages that take you through how to calculate total taxes for the year, it's definitely worth taking a brief dive into them if you haven't yet. If you are a trainee at a VA you will not be eligible to contribute to TSP (their 401k analogue) but your years of service will count towards vesting if you ever take a VA job. It's worth considering whether to contribute some money to a Roth IRA during training years, since your effective tax rate will probably be much lower during training and early years of employment than later in your career.

 

[Justanothergrad]

4. Can somebody give me a rudimentary estimate of what the actual monthly take-home pay would be if, for example, you were working at a VA in Kansas with a yearly stipend of $28,000 (this is hypothetical)?

Thanks for any input!

Not sure if it would be helpful, but feel free to PM if you want to know more about how that translates to living expenses for the different VAs / areas surrounding them.

 

[attitudelikeasunrise]

I have a much more clear picture of how this all works now. Thank you, everyone, for your valuable input!

 

[attitudelikeasunrise]

Not sure if it would be helpful, but feel free to PM if you want to know more about how that translates to living expenses for the different VAs / areas surrounding them.

That would be great! For some reason, it isn't giving me an option to PM you. Do you have any restrictions on your message settings currently?