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Author Topic: Income Based Repayment Options/ Also Married/ Filing Separately?  (Read 3372 times)

HeatherMae

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Income Based Repayment Options/ Also Married/ Filing Separately?
« on: February 21, 2017, 01:05:46 PM »
I am attempting to navigate the repayment of my student loans. I attended both an undergraduate and graduate school. I graduated, learning too late about the dire career possibilities in my field and not looking at student loans as something I would have to pay back. Now, I am learning from my mistakes and carelessness about taking out loans. I owe almost 140k in student loans. Currently, I am in an unrelated field (real estate and I also do freelance work). I am entirely 1099.
My husband (married after I finished) makes substantially more than me and although married, I do not want to put my student loan debt onto him. We have previously filed jointly, as he makes a good amount of money, and my tax deductions from self employment benefit him. I would not qualify for income based repayment with his income this year. Can I still file for income based repayment if we file separately? He will lose all of my benefits but otherwise we are facing close to 1600 a month in student loan payments. If I file separately, can I still qualify for income based, even though my income is not guaranteed being self employed basically?
My loans have until now been in forebearance, but I am ready to tackle them, whatever that means.

TheCollegeInvestor

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Re: Income Based Repayment Options/ Also Married/ Filing Separately?
« Reply #1 on: February 21, 2017, 01:27:32 PM »
You will likely find this article helpful to explore if it's worthwhile. Also, you should consider speaking to a tax professional.

https://thecollegeinvestor.com/17807/the-math-behind-married-filing-separately-for-ibr-or-paye/

Lee

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Re: Income Based Repayment Options/ Also Married/ Filing Separately?
« Reply #2 on: March 31, 2017, 07:52:41 AM »
My situation is similar to HeatherMae.  I owe over 123k in law student loans and my husband has no student loan debt. We married post graduation.  While unemployed, I was in forebearance for as long as possible.  I now make 1/3 the salary of my husband. I started to "tackle" my student loan debt with IBR, filing married but separate.  However, the CPA we now use tells us that because we live in Louisiana, we cannot file married filing separate.  That because LA is a community property state, we need to file a "decree of parafinality," which I assume he means a "separate in property" agreement.  This sounds wrong, as that would affect other rights in the marriage.  Do you have any information on community property states and filing separate but married for student loan IBR? Or is there a publication with the IRS on this?

TheCollegeInvestor

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Re: Income Based Repayment Options/ Also Married/ Filing Separately?
« Reply #3 on: March 31, 2017, 04:25:56 PM »
Each state has laws regarding it, so your accountant would be the best point of contact. Generally, you basically split your combined income and expenses for taxes (versus taking yours versus his). As for IBR, the math is still the same based on that calculation - and so it can still help you lower your payments.

However, talk to a tax professional.