Just to start off, my wife and I are very happy and plan to stay together, however, being legally married is dramatically increasing our tax burden.
We currently live in Houston, TX and are renting. I am a consultant with an MBA making ~$140k annually. I have roughly $90k and 5 years left on my graduate school loans and am paying $1,700 monthly.
My wife just started her intern year in July and is making ~$55k annually ($27k in 2017). She has ~$250k in federal debt and another $100k in private loans. She is in income based repayment and is paying $450 a month on the Federal loans based upon 1/2 year of my salary. We are hoping for PSLF and plan to file separately for tax year 2017 to keep her required payment low.
If we were to be single filers:
Would love to hear everyone's thoughts on both getting divorced as well as filing jointly vs. separately. I am happy to provide more info/context if there are any follow-up questions.
We currently live in Houston, TX and are renting. I am a consultant with an MBA making ~$140k annually. I have roughly $90k and 5 years left on my graduate school loans and am paying $1,700 monthly.
My wife just started her intern year in July and is making ~$55k annually ($27k in 2017). She has ~$250k in federal debt and another $100k in private loans. She is in income based repayment and is paying $450 a month on the Federal loans based upon 1/2 year of my salary. We are hoping for PSLF and plan to file separately for tax year 2017 to keep her required payment low.
If we were to be single filers:
- She would continue to have a low payment on her loans
- We would both be able to deduct our student loan interest payments
- I would have a much lower tax rate for my income
- I would be able to convert an older 401k to a Roth IRA at a much lower tax rate (28% vs 33%)
Would love to hear everyone's thoughts on both getting divorced as well as filing jointly vs. separately. I am happy to provide more info/context if there are any follow-up questions.
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