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Blade28

Silly question...but I heard from another applicant that when a residency program's wages are listed as a "stipend" instead of "salary," then they're not taxed. (Or, at least, they're taxed less than a "normal" salary.) Is this true? Should I be checking to see which programs offer a yearly stipend, and which offer a (regular) salary?

Thanks!
 

Rony

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Two things are certain in life - death and taxes....
Dude, this has been asked and answered numerous times...you're trying to be a doctor for crying out loud...not a lawyer...stay away from this linguistic ambiguity...the money you make next year is income...and rest assured it is taxed on both the federal and state level where applicable (unless you go to TN or FL...etc.) Period.
 

pht2c

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The central issue is whether or not FICA/social security taxes are paid or not. If residents are considered students, no FICA is paid. IRS is still haggling over it. Here's a link on the issue:
http://www.aamc.org/advocacy/library/teachhosp/hosp0039.htm

If you want to avoid taxes, look towards working in FL or DE. A residents salary goes a little further there. No state tax is nice, but no sales tax? That's so much sweeter. :thumbup:
 

passlineandodds

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If you're looking to stretch your pre-tax dollar, look closely at the benefits you get. A good example is health insurance. It's pre-tax income, so it is one of the best things you can buy. Also, consider putting money into a retirement account to lower your taxable income. With residents' salaries we qualify for a Roth IRA which has a lot of tax advantages. Another point to consider heading into residency is that if you are buying a house, the interest paid on your mortgage is tax-deductible. I'm sure there are a million other financial minutiae that we never hear about in medical school but are important in residency. Then again, that's what financial planners and parents with good advice are for.