Bar stipend tax question

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Anonymous User
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Bar stipend tax question

Postby Anonymous User » Thu Feb 12, 2015 4:10 pm

Calling all tax gurus:

Current 3L, joining firm as first-year associate come fall. Just received bar stipend memo and tax options from firm. We can choose the "fully exempt from federal or state taxes" option or the "fully taxed" option [at bonus rate: 25% fed; ~6-10% for state]. What factors should I consider and which option is better for me in the long run?

Possibly relevant details: I'm unmarried, no dependents. I'm not working in the 2015 taxable year until I start at DC firm ($160k) in October. Bar study stipend is in the range of $15-17k. Don't really need the full amount upfront, but wouldn't mind.

Thank you in advance, tax genies!

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Desert Fox
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Re: Bar stipend tax question

Postby Desert Fox » Thu Feb 12, 2015 5:01 pm

Anonymous User wrote:Calling all tax gurus:

Current 3L, joining firm as first-year associate come fall. Just received bar stipend memo and tax options from firm. We can choose the "fully exempt from federal or state taxes" option or the "fully taxed" option [at bonus rate: 25% fed; ~6-10% for state]. What factors should I consider and which option is better for me in the long run?

Possibly relevant details: I'm unmarried, no dependents. I'm not working in the 2015 taxable year until I start at DC firm ($160k) in October. Bar study stipend is in the range of $15-17k. Don't really need the full amount upfront, but wouldn't mind.

Thank you in advance, tax genies!


I chose the untaxed and still got a pretty large refund since I had tuition deductions.

For my state taxes, I got hit with an underpayment penalty, but it was small. I bet you could do some sort of quarterly payment and not even get that.

I didn't wanna fall short and have to resort to more loans or CC debt, so I took the extra cash.




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