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46 comments
Can grad students not deduct their tuition under this provision?
https://ttlc.intuit.com/questions/3682982-i-received-tuition...
> If the expense was for education required to keep your job, or that improves your skills in your current job
Sounds like it would fit grad school.
https://ttlc.intuit.com/questions/3682982-i-received-tuition...
> If the expense was for education required to keep your job, or that improves your skills in your current job
Sounds like it would fit grad school.
most phd programs "charge" students "20-30K" in "tuition" (all in quotes as it just moving money from one university pocket to another.
Grad students need to organize work-stoppages and demand fair pay. Then taxation becomes a secondary, but still important, issue.
Also, America needs to holistically fix the election process and public office accountability to prevent inexperienced, unsuitable, populist cult leaders from becoming fascist kleptoautocrats and forcibly remove the existential threat to humanity that stems from the corruption by the corporate-political-media complex. Then, perhaps Congress will do the people's work, and not just give themselves and their rich buddies additional socialist subsidies while foisting austerity on everyone else.
Also, America needs to holistically fix the election process and public office accountability to prevent inexperienced, unsuitable, populist cult leaders from becoming fascist kleptoautocrats and forcibly remove the existential threat to humanity that stems from the corruption by the corporate-political-media complex. Then, perhaps Congress will do the people's work, and not just give themselves and their rich buddies additional socialist subsidies while foisting austerity on everyone else.
> The House bill would also end the student loan interest deduction
This seems even more mystifying to me. Unlike taxing grad student tuition waivers (which affects a tiny minority of the population) this seems like it would affect a lot of people.
This seems even more mystifying to me. Unlike taxing grad student tuition waivers (which affects a tiny minority of the population) this seems like it would affect a lot of people.
When was the last time you knew of somebody who took the student loan interest deduction? I'm still paying off my graduate degree loans and never once have my interest payments been larger than the standard deduction.
My wife takes this deduction every year. Most doctors in their 30s or 40s (depending on their specialty) take this deduction. You probably know lots of folks who take, but they never talk about it. I’m sure that will change soon.
really? unless you live in a state without income tax / don't earn a tech oriented salary, in many states your state/local tax will be greater than the standard deduction.
though that seems to be going the way of the dodo as well.
though that seems to be going the way of the dodo as well.
Does anyone have a link to an analysis of what was actually voted on?
NPR piece: https://www.npr.org/2017/11/14/563879136/house-gop-tax-plan-...
Plenty of other sources out there, Google has some good ones at the top (search "GOP tax plan graduate studies" or similar).
Plenty of other sources out there, Google has some good ones at the top (search "GOP tax plan graduate studies" or similar).
I added the "what was actually voted on" because I assume the sources I read 2 weeks ago might no longer be accurate (assuming there was any debate and adjustment of the bill in committee).
On Duck Duck Go and Google, after you search for "GOP tax plan graduate studies" you can further limit to results to the last 24 hours. Or you can search "news", which is generally ordered so the most recent results come first.
For example, http://www.ricethresher.org/article/2017/11/gop-tax-plan is from yesterday, with a side-by-side comparison of the current tax plan with the new one, and possible effects on different departments.
For example, http://www.ricethresher.org/article/2017/11/gop-tax-plan is from yesterday, with a side-by-side comparison of the current tax plan with the new one, and possible effects on different departments.
TL;DR: the Tax Cuts and Jobs Act, on which the House favorably voted today, includes a repeal of Section 117(d)(5) of the current tax code, which makes tuition exemption at universities for grad students non taxable.
Pretty much every single research graduate student in STEM fields benefits from tuition exemption. You typically make $15-$25k in research or teaching assistantship (I made $18k as a grad student at a large state university), but as an added bonus you don't pay tuition, which usually ranges from $10 to $50k. This means that even though your salary is low, it's still enough for the necessities.
But with this change, if you make $20k in assistantships and get exemption on a $50k tuition, you're taxable on $70k. Depending on your state, that's likely most of, if not more than, your original assistantship.
This is pure insanity. If this passes and remains in effect more than a few years, it will utterly destroy US grad schools, and by extension academic competitivity (who does the brunt of the teaching and grading for undergrads at US universities? Grad students). I moved to the US for grad school because the meager assistantship + tuition exemption made it worth it; without this, I would not have moved to the US for grad school, not started a company there, and not paid hundreds of thousands (if not millions at this point, I am not keeping track) of dollars in taxes to the state and federal governments.
I'm not sure if the current administration is playing a game of who can destroy the US's economic and academic superiority as fast as they can, but if so they're certainly on the right track.
Pretty much every single research graduate student in STEM fields benefits from tuition exemption. You typically make $15-$25k in research or teaching assistantship (I made $18k as a grad student at a large state university), but as an added bonus you don't pay tuition, which usually ranges from $10 to $50k. This means that even though your salary is low, it's still enough for the necessities.
But with this change, if you make $20k in assistantships and get exemption on a $50k tuition, you're taxable on $70k. Depending on your state, that's likely most of, if not more than, your original assistantship.
This is pure insanity. If this passes and remains in effect more than a few years, it will utterly destroy US grad schools, and by extension academic competitivity (who does the brunt of the teaching and grading for undergrads at US universities? Grad students). I moved to the US for grad school because the meager assistantship + tuition exemption made it worth it; without this, I would not have moved to the US for grad school, not started a company there, and not paid hundreds of thousands (if not millions at this point, I am not keeping track) of dollars in taxes to the state and federal governments.
I'm not sure if the current administration is playing a game of who can destroy the US's economic and academic superiority as fast as they can, but if so they're certainly on the right track.
Maybe, though in STEM fields, anyways, the Department pays for the first year of tuition (essentially the University paying itself), and than an advisor pays out of his grant money (which is usually from the Fed. gov't, and so essentially the Feds paying themselves).
So in a perfect world, Universities would just say grad-student tuition is 0$ for the first year, since they don't net any $ from it anyways, and than the Federal gov't would just up grants by whatever is needed to cover the extra tax bill, which would be less efficient but ultimately a wash as far as the money is concerned.
In reality, I think this will happen to some extent, but not enough to totally reverse the change, and there will be a sizable drop in grad-students pop. in the US. Given extra grant money, Profs are likely to use some of it to cover their grad-students tax bills, but at the same time, those students will now be more expensive relative to fancy microscopes or whatever, and so fewer grad-students will be hired.
So in a perfect world, Universities would just say grad-student tuition is 0$ for the first year, since they don't net any $ from it anyways, and than the Federal gov't would just up grants by whatever is needed to cover the extra tax bill, which would be less efficient but ultimately a wash as far as the money is concerned.
In reality, I think this will happen to some extent, but not enough to totally reverse the change, and there will be a sizable drop in grad-students pop. in the US. Given extra grant money, Profs are likely to use some of it to cover their grad-students tax bills, but at the same time, those students will now be more expensive relative to fancy microscopes or whatever, and so fewer grad-students will be hired.
But can’t you deduct expenses for higher education? What’s the cutoff? Does this only affect top grad schools?
If this helps to bring sanity to the cost of schooling, then so be it.
Colleges have raised rates consistently each year. There's always money for big athletic programs, rich salaries at the top, etc.
Students find themselves facing huge fees, outright scams WRT books, etc. It's a racket.
I welcome this move as a step closer to legitimizing online/MOOC degrees. We'll all be better off.
Colleges have raised rates consistently each year. There's always money for big athletic programs, rich salaries at the top, etc.
Students find themselves facing huge fees, outright scams WRT books, etc. It's a racket.
I welcome this move as a step closer to legitimizing online/MOOC degrees. We'll all be better off.
The headline is sensationalist click-bait, but it is the title of the article, and the article is an opinion piece. I'm not sure whether the HN entry should be re-named or not.
I don't know if calling it sensationalist is reasonable.
>This means that M.I.T. graduate students would be responsible for paying taxes on a $80,000 annual salary, when we actually earn $33,000 a year. That’s an increase of our tax burden by at least $10,000 annually.
Getting by on $28,000/year (taking into consideration 15% in taxes) is really tough. Getting by on $18,000/year is almost impossible. And if they're working 40-80 hour weeks then they hardly have time to do anything else.
>This means that M.I.T. graduate students would be responsible for paying taxes on a $80,000 annual salary, when we actually earn $33,000 a year. That’s an increase of our tax burden by at least $10,000 annually.
Getting by on $28,000/year (taking into consideration 15% in taxes) is really tough. Getting by on $18,000/year is almost impossible. And if they're working 40-80 hour weeks then they hardly have time to do anything else.
OK, but by that standard, undergrads are already bankrupt, because they're paying $45,000 per year on a salary of $0. So, yes, I think it's still fair to call it sensationalist.
What's actually going to happen is that universities are going to have to pay their grad students more - which they will, because grad students are still a cheap resource for the university.
At least, that's what would happen in a reasonable situation. Education often isn't, though.
What's actually going to happen is that universities are going to have to pay their grad students more - which they will, because grad students are still a cheap resource for the university.
At least, that's what would happen in a reasonable situation. Education often isn't, though.
>OK, but by that standard, undergrads are already bankrupt, because they're paying $45,000 per year on a salary of $0. So, yes, I think it's still fair to call it sensationalist.
Well, they probably have scholarships.
>What's actually going to happen is that universities are going to have to pay their grad students more - which they will, because grad students are still a cheap resource for the university.
Well, they won't be cheap if they have to pay them more!
>At least, that's what would happen in a reasonable situation. Education often isn't, though.
And it's somehow reasonable to tax discounts like income?
Well, they probably have scholarships.
>What's actually going to happen is that universities are going to have to pay their grad students more - which they will, because grad students are still a cheap resource for the university.
Well, they won't be cheap if they have to pay them more!
>At least, that's what would happen in a reasonable situation. Education often isn't, though.
And it's somehow reasonable to tax discounts like income?
> Well, they probably have scholarships.
Some do. More have loans.
> Well, they won't be cheap if they have to pay them more!
Compared to professors? They'll still be cheap - just not as cheap as before.
> And it's somehow reasonable to tax discounts like income?
Maybe? If I work for a car dealership, and they give me a car as part of my employment there, it seems reasonable to me that the car counts as part of my compensation, and therefore is taxable. If they sell me the car for $1 because I'm employed there, it seems reasonable to me that that "discount" is part of my compensation, and is therefore taxable. On the other hand, if I work anywhere, and my company pays for my health insurance, that is not taxable, and nobody wants it to be.
So which is the "normal" case, the car or the health insurance?
Some do. More have loans.
> Well, they won't be cheap if they have to pay them more!
Compared to professors? They'll still be cheap - just not as cheap as before.
> And it's somehow reasonable to tax discounts like income?
Maybe? If I work for a car dealership, and they give me a car as part of my employment there, it seems reasonable to me that the car counts as part of my compensation, and therefore is taxable. If they sell me the car for $1 because I'm employed there, it seems reasonable to me that that "discount" is part of my compensation, and is therefore taxable. On the other hand, if I work anywhere, and my company pays for my health insurance, that is not taxable, and nobody wants it to be.
So which is the "normal" case, the car or the health insurance?
Maybe it needs '[Opinion]' added to make the context clear?
The issue is not the tax bill. The issue is the exorbitant price for graduate school, and the financial burden schools place on students. At my alma matter, most of the graduates students, across the school, are foreign students. They pay the most. That's the only thing the schools are interested in: more money. I think this tax bill, and other legislation, should clamp down on overcharging graduate students.
Why is this hyper political stuff on the front page?
Same answer as every other "why is it on HN?" question...
Because HN readers find it interesting and the forum is sort-of self-regulating.
Because someone submitted it, and people upvoted it.
That's a decent question. Grad school is something that many here are concerned about, though (and the cost of education). Here's hoping we can actually discuss it in a civil way.
Click bait title.
I sympthatize with the article and the person writing it, but if they shouldn't be taxed, why should people who pay post tax income for their undergraduate degree?
Because funded grad students are paid way, way below what they could get in a "real job" because it's an arrangement that benefits all: the grad student get the education and the degree, and the schools get cheap labor. Undergrads are typically not full-time employees of the school they attend. Funded grad students are. And for PhD students that are no longer taking classes, they are typically a net-positive in terms of cost.
For example, in my last two years of PhD, I was both a teaching assistant and an instructor. When grading finals weeks before graduating, one of the instructors I was a TA for joked that he's surprised they were letting me graduate because I was far too useful.
For example, in my last two years of PhD, I was both a teaching assistant and an instructor. When grading finals weeks before graduating, one of the instructors I was a TA for joked that he's surprised they were letting me graduate because I was far too useful.
The fact that they're paid below a "real job" is irrelevant. Should people working part time while doing their undergrad degree to pay if off also get the same benefit?
Like TAs they too are getting paid less than what they would with a "real job", working full time.
Not to mention getting a graduate degree is a relative privilege to begin with. Either everyone should get the benefit, or they should take loans out and not be required to work like everyone else. Anything else is just hypocrisy.
Like TAs they too are getting paid less than what they would with a "real job", working full time.
Not to mention getting a graduate degree is a relative privilege to begin with. Either everyone should get the benefit, or they should take loans out and not be required to work like everyone else. Anything else is just hypocrisy.
The "real job" point is that people willingly are paid very little because of the arrangement. Undergrads are typically not full-time employees of the university, so it doesn't make sense for them to get the waiver. But, if an undergrad had a full scholarship from a university, I would also not want that taxed as income.
It's this arrangement that enables more people to become grad students, not less. As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school.
It's this arrangement that enables more people to become grad students, not less. As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school.
> As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school.
Again, the NYT article is fallacious. Such a student could take out loans, just like undergraduate students.
It's nonsensical. There's no reason for admission and payment to be coupled.
Also, the amount being paid is irrelevant. A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed. This arrangement is beneficial to the university. Not to mention the student would be taxed more heavily as well.
Again, the NYT article is fallacious. Such a student could take out loans, just like undergraduate students.
It's nonsensical. There's no reason for admission and payment to be coupled.
Also, the amount being paid is irrelevant. A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed. This arrangement is beneficial to the university. Not to mention the student would be taxed more heavily as well.
> A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed.
The reason they don't do it is because for a large population of the grad students, it doesn't cost the university that much for that student to be at their school.
Loans are an extra burden, and grad school is an unbounded process. I spent 7.5 years in grad school. In practice, far, far fewer people will do it, and it will tend to be people who are already much better off financially. This will hinder class and economic upward mobility.
The reason they don't do it is because for a large population of the grad students, it doesn't cost the university that much for that student to be at their school.
Loans are an extra burden, and grad school is an unbounded process. I spent 7.5 years in grad school. In practice, far, far fewer people will do it, and it will tend to be people who are already much better off financially. This will hinder class and economic upward mobility.
I'm really not understanding you.
1. Everything you said applies to undergraduate students.
2. Undergraduate students are more in need than graduate students, not to mention that graduate students are better off financially.
So, yeah.
1. Everything you said applies to undergraduate students.
2. Undergraduate students are more in need than graduate students, not to mention that graduate students are better off financially.
So, yeah.
I don't think undergrad students tend to spend 20 - 40 hours of their week teaching classes for the university they attend.
Again, I fail to see the relevance. There are undergraduates who work that much. Not to mention that no one forces you to do graduate school.
Why should graduate students alone get this benefit? For doing work they signed up for? Should university employees also not be taxed? There are tons of low paid researchers. Adjunct professors, etc.
Graduate students can just take loans out like everyone else (not that I like loans) You literally haven't given a reason for their special treatment. I think you're blind to the reality because you happened to go through grad school.
Finally, only top stem programs are funded. Most grad students, even phds, get loans. There's zero reason to discriminate on this.
Why should graduate students alone get this benefit? For doing work they signed up for? Should university employees also not be taxed? There are tons of low paid researchers. Adjunct professors, etc.
Graduate students can just take loans out like everyone else (not that I like loans) You literally haven't given a reason for their special treatment. I think you're blind to the reality because you happened to go through grad school.
Finally, only top stem programs are funded. Most grad students, even phds, get loans. There's zero reason to discriminate on this.
The graduate student is only getting paid $33k/yr. The university is paying for/waiving the student's $50k/yr tuition. Why should the student pay taxes on what the university is paying?
Except they're not being paid just $33k/yr. The IRS already has a precedent surrounding cash-value equivalents.
This seems like apples and oranges.
In exchange for work, grad students usually get a combination of a stipend and free/subsidized tuition. This is described in the second paragraph of TFA.
> why should people who pay post tax income for their undergraduate degree
Are they being paid to get their undergrad degree? Most likely they are paying. And tuition at an accredited educational institution has traditionally been tax deductible, so it's not technically "post-tax income".
In exchange for work, grad students usually get a combination of a stipend and free/subsidized tuition. This is described in the second paragraph of TFA.
> why should people who pay post tax income for their undergraduate degree
Are they being paid to get their undergrad degree? Most likely they are paying. And tuition at an accredited educational institution has traditionally been tax deductible, so it's not technically "post-tax income".
If your income is at a level where you are paying cash for tuition, you likely do not qualify for education-related tax benefits.
AOTC requires AGI <$80k ($160k married/joint) LLC requires AGI <$65k ($130k married/joint) Tuition deduction requires AGI <$80k ($160k married/joint)
AOTC requires AGI <$80k ($160k married/joint) LLC requires AGI <$65k ($130k married/joint) Tuition deduction requires AGI <$80k ($160k married/joint)
You can already take a tax deduction for eligible educational expenses for yourself or dependents. Undergraduate tuition certainly falls under that
No, they voted to force graduate students into the workforce (to avoid bankruptcy). Just like in 2008, they forced baby boomers to delay retirement and scared millennials into getting and holding onto jobs.
Remember, the function of government and the economy is to coerce people to work.
Remember, the function of government and the economy is to coerce people to work.
If in a country there are the following ten evils: rites, music, odes, history, virtue, moral culture, filial piety, brotherly duty, integrity and sophistry, the ruler cannot make the people fight and dismemberment is inevitable; and this brings extinction in its train. If the country has not these ten things and the ruler can make the people fight, he will be so prosperous that he will attain supremacy. A country where the virtuous govern the wicked, will suffer from disorder, so that it will be dismembered; but a country where the wicked govern the virtuous, will be orderly, so that it will become strong. A country which is administered by the aid of odes, history, rites, music, filial piety, brotherly duty, virtue and moral culture, will, as soon as the enemy approaches, be dismembered; if he does not approach, the country will be poor. But if a country is administered without these eight , the enemy dares not approach, and even if he should, he would certainly be driven off when it mobilizes its army and attacks, it will capture its objective, and having captured it, will be able to hold it; when it holds its army in reserve, and makes no attack, it will be rich. A country that loves force is said to attack with what is difficult; a country that loves words is said to attack with what is easy. A country that attacks with what is difficult will gain ten points for every one point that it undertakes, whereas a country that attacks with what is easy will lose a hundred men for every ten that it marches out.
...
Sophistry and cleverness are an aid to lawlessness; rites and music are symptoms of dissipations and licence; kindness and benevolence are the foster-mother of transgressions; employment and promotion are opportunities for the rapacity of the wicked. If lawlessness is aided, it becomes current; if there are symptoms of dissipation and licence, they will become the practice; if there is a foster-mother for transgressions, they will arise; if there are opportunities for the rapacity of the wicked, they will never cease. If these eight things come together, the people will be stronger than the government; but if these eight things are non-existent in a state, the government will be stronger than the people. If the people are stronger than the government, the state is weak; if the government is stronger than the people, the army is strong. For if these eight things exist, the ruler has no one to use for defence and war, with the result that the state will be dismembered and will come to ruin; but if there are not these eight things, the ruler has the wherewithal for defence and war, with the result that the state will flourish and attain supremacy.
...
Punishment produces force, force produces strength, strength produces awe, awe produces virtue. Virtue has its origin in punishments. For the more punishments there are, the more valued are rewards, and the fewer rewards there are, the more heed is paid to punishments, by virtue of the fact that people have desires and dislikes. What they desire are the six kinds of licence, and what they dislike are the four kinds of hardship. Indulgence in these six kinds of licence will make the country weak; but the practice of these four kinds of hardship will make the army strong. Therefore, in a country which has attained supremacy, punishments are applied in nine cases and rewards in one. If in nine cases, punishments are applied, the six kinds of licence will stop, and if in one case rewards are given, the four kinds of hardship will be practised. If the six kinds of licence are stopped, the country will be without crime; and if the four kinds of hardship are practised, the army will be without equal.
...
A weak people means a strong state and a strong state means a weak people. Therefore, a country, which has the right way, is concerned with weakening the people. If they are simple they become strong, and if they are licentious they become weak. Being weak, they are law-abiding; being licentious, they let their ambition go too far; being weak, they are serviceable, but if they let their ambition go too far, they will become strong. Therefore is it said: 'To remove the strong by means of a strong people brings weakness; to remove the strong by means of a weak people brings strength.'
...
Sophistry and cleverness are an aid to lawlessness; rites and music are symptoms of dissipations and licence; kindness and benevolence are the foster-mother of transgressions; employment and promotion are opportunities for the rapacity of the wicked. If lawlessness is aided, it becomes current; if there are symptoms of dissipation and licence, they will become the practice; if there is a foster-mother for transgressions, they will arise; if there are opportunities for the rapacity of the wicked, they will never cease. If these eight things come together, the people will be stronger than the government; but if these eight things are non-existent in a state, the government will be stronger than the people. If the people are stronger than the government, the state is weak; if the government is stronger than the people, the army is strong. For if these eight things exist, the ruler has no one to use for defence and war, with the result that the state will be dismembered and will come to ruin; but if there are not these eight things, the ruler has the wherewithal for defence and war, with the result that the state will flourish and attain supremacy.
...
Punishment produces force, force produces strength, strength produces awe, awe produces virtue. Virtue has its origin in punishments. For the more punishments there are, the more valued are rewards, and the fewer rewards there are, the more heed is paid to punishments, by virtue of the fact that people have desires and dislikes. What they desire are the six kinds of licence, and what they dislike are the four kinds of hardship. Indulgence in these six kinds of licence will make the country weak; but the practice of these four kinds of hardship will make the army strong. Therefore, in a country which has attained supremacy, punishments are applied in nine cases and rewards in one. If in nine cases, punishments are applied, the six kinds of licence will stop, and if in one case rewards are given, the four kinds of hardship will be practised. If the six kinds of licence are stopped, the country will be without crime; and if the four kinds of hardship are practised, the army will be without equal.
...
A weak people means a strong state and a strong state means a weak people. Therefore, a country, which has the right way, is concerned with weakening the people. If they are simple they become strong, and if they are licentious they become weak. Being weak, they are law-abiding; being licentious, they let their ambition go too far; being weak, they are serviceable, but if they let their ambition go too far, they will become strong. Therefore is it said: 'To remove the strong by means of a strong people brings weakness; to remove the strong by means of a weak people brings strength.'
The answer from this administration appears to be 'yes', given the generally anti-science and research policies coming out of DC these days.
My wife works in a lab with grad students, and they've all been freaking out over this. I'm going to guess that just went to 11 today.