Quote:
Originally Posted by LivingAlmostLarge
I heard the stipend is income. At least our friend's stipend as a consultant is. Please check with a CPA. But it's all income. Especially if they report paying you $90k + $3k/month in travel expenses.
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Reading this thread is giving me a headache. I have to agree that I would speak with a CPA.
Not that you can't read up on all this yourself, but it gets real complicated real fast.
Most of the info above is correct.
Stipends, if you track your expenses and they are equal to more than your stipend, generally they are tax-free. Generally if you submit receipts for reimbursement, it is tax free. If you just get a set amount, it isn't. But you can keep an accounting of it and probably be on safe ground. IT just gets complicated.
However, you can't take the same deductions you are reimbursed for (As tax deductions) and then consider the stipend as tax free. That's another double dip.
Likewise, the thing about home office deduction is you depreciate a portion of your home (& you are talking quite a large percentage of your home). When you sell the home there are tax consequences there.
Finally, you completely lose miscellaneous itemized deductions if you hit AMT. You have 2 kids, talking higher income, and are talking about multiple properties. That is a pretty sure recipe for AMT. Your specific situation may not warrant AMT worries, but had to throw out an example of just what complicated ground you are getting into. How much this really matters is at the whim of the legislature and their wonderful last minute AMT patches. I'll get back to you in December on that.