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Taxes - married filing sep due to student loans?

buppydups10buppydups10 member
in May 2015 Moms
Sorry this is so off topic of our babies but I don't know anyone in my situation and hoping maybe someone here can help.

I owe over 100k in student loan debt. I don't work and DH makes over 120k a year. When I do get a job in my field (education, it's been 5 years of leave replacements but nothing permanent) I will qualify for the public service repayment plan, which is pay based on my income for 10 years and the rest will be forgiven. This is what I feel is the best option, as we will have nearly 50k forgiven by time the 10 years is up.

the accountant just told DH that if we file separate, he will owe 7k. If we file together, we will get back 700. I still think it's the smartest decision in the long run to make a payment plan and file separate.

Anyone else in this situation? What's worked for you? I'm so stressed over this :(
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Re: Taxes - married filing sep due to student loans?

  • bean8213bean8213 member
    I haven't done the math, but my gut says to file jointly, take the 7K and put it toward paying down the student loans. Those loans are accruing interest while you look for a position and you don't know that you will get one any time soon. Plus, there are tax benefits for filing jointly once you have a kid - FSA allowance for daycare jumps out as one of those. I would talk with your accountant about it further and be realistic about your job situation with him/her. They can probably crunch the numbers for you quickly.
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  • leelee72leelee72 member
    I was in this situation a couple years ago and they took our refund to pay towards my outstanding loans. So I say file jointly and get the minimum back and work on a payment plan for your student loans. We always file jointly
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  • mrsgunstamrsgunsta member
    My husband and I file married/separately because of this. I have 6 years left on public service forgiveness. They will also take into account his income when calculating your payment, so you lose all the benefits if you file jointly. FWIW, I have $65 k and pay $250 a month. If we went jointly my payment would be $650 a month. We got back $1,600 this year.
    Lilypie Maternity tickers
    DH: 32
    Me: 31
    Baby #1: BFP 1/30/14, EDD 9/28/14, natural MC @ 6 weeks
    Baby #2: BFP 8/1/2014, EDD 4/9/2015, It's a GIRL: Addison Elizabeth!

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  • DMELDMEL member
    I'm in the same boat as you with loan forgiveness and have been filing separately. We owed the first year we did it but then found a better accountant and have been getting refunds ever since.
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  • jenniferwebb718jenniferwebb718 member
    Be careful with the public service loan forgiveness thing. My husband and I are both teachers in Texas and have thought that we would be able to get this. We've both been teaching 5 years and have been trying for 5 years to get a straight answer from our loan companies about how it works. We finally got an answer and it Turns out you can only get it if you are on an approved payment plan and the only approved payment plan is the 10 year plan so your loans are gone by the time you qualify for forgiveness. Basically, the program is a load of BS.
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  • jmorneau09jmorneau09 member
    The only way to get the remaining balance forgiven after 10 years is if you are on an income based payment plan that you set up with whomever is carrying your loan. The problem is that it is based off of yours and your spouses income and if its a decent one or up there it wont help you with lowering your current payment or getting anything forgiven. Basically it will only help people who don't make much because they will pay a lower amount based on their income and then have some forgiven. Basically it's one more way for middle class to get screwed.

    Your loan carrier is also the company who you will get and fill out the paperwork for the teacher forgiveness that you can get after teaching full time for five years. Just Call your loan carrier. That one I know is not based off of income. Only years taught. It won't forgive a huge amount but some is better than nothing.
    I feel for ya I have a bunch of student loans too and we make too much to set up this plan. I actually cried the other day about it because I really need a bigger car for baby but with the ginormous student loan payments I have its just not going to happen.
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