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Robin D.
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Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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My daughter is 22 years old and married. She is living with

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My daughter is 22 years old and married. She is living with me, but is self-supportive and will begin grad school this August. She received a job on campus and will receive a $750 stipend each month for working 20 hours per week and her tuition will be waived during this time as well. Is this income taxable? And can she deduct mileage, books or other expenses? How much do you suggest she put aside for the taxes? Thank you.
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Hello and thank you for using Just Answer.

The income your daughter will receive is taxable.A stipend is defined as a fixed sum of money paid periodically for services or to defray expenses. The fact that remuneration is termed a "fee" or "stipend" rather than salary or wages is not important. Wages are generally subject to employment taxes and should be reported on Form W-2. Federal and state withholding taxes should be taken out of each paycheck so she should not need to worry about setting any aside or paying estimated taxes. The school should have required her to fill out a W4 for withholding. The mileage will not be a deductible item for your daughter unless she is required to use her vehicle in the course of her work (not just to get there and back home).

As far as her books and fees, the term "qualified tuition and related expenses" has been expanded to include expenditures for required course materials. For this purpose, the term "course materials" means books, supplies and equipment required for a course of study. Your daughter can use the amounts she spends as a credit or deduction whichever works out better for her on her tax return. Forty percent of the credit is refundable, so even those who owe no tax can get a refund possibly.

I sincerely XXXXX XXXXX information is helpful,

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7860
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D.
Robin D.
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15years with H & R Block. Divisional leader, Instructor