I receive my grant from the graciousness of former Japanese Fulbright grantees and other Japanese companies. None of the money comes from the US government. Zero. Tell me, then, why is all of it taxable in the United States? Why are students "enrolled in degree granting programs" entitled to tax-free money, while those of us doing independent research and promoting "cultural exchange" have to pay ridiculous sums to Uncle Sam?
I have been reading and rereading the tax forms and tax instructions and explanations of the tax instructions for the past three hours trying to figure out exactly where my grant falls into this mess of a system. I particularly love the section in Publication 520, Scholarships and Fellowships, under the heading Studying or Teaching Under Fulbright Grants, that says,
If you are a lecturer, teacher, research scholar, or student who receives a grant...under the Fulbright-Hays Act, you will probably encounter tax situations different from those discussed earlier in this publication.
Contrary to what you might expect, it does not go on to explain what I should do with my different tax situations. It says I MAY be eligable for some stuff, and I MIGHT be able to do some other stuff, but really, it doesn't say anything at all. I would like to take it to be a secret code that really means, "We don't actually understand what's going on here either, so do whatever you feel like and we promise not to hunt you down for not paying your taxes correctly." However, I'm not particularly talented at reading between the lines, so I will probably not risk it. Instead, I will tell them everything, and consequently will pay more taxes than my mother, who has a real job.
p.s. If you, or someone you know, understands this tax mumbo jumbo, please, oh please, help me!
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3 comments:
What if you contact Fulbright? Surely they have run into this before.
As I understand it, reading the IRS doc, you are exempt for up to $70,000 of income that is earned from Japanese sources. The wording of the paragraph on Fulbrights indicates that you are more likely to be exempt from taxes, than you are to be taxed. But Chrystina has it right, that you should contact Fulbright to be sure. Failing that, an accountant may be necessary. If it saves you hundreds of dollars...
The Japan office of Fulbright is not allowed to give out tax advice. And my accountant is confused as well. Every Fulbright grantee that I have talked to is doing something completely different. So maybe it doesn't matter at all.
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