Hi everyone - love the site and the forums and would love some feedback to make sure I'm thinking through this correctly.
My wife (attending for 1.5 years) and I (finishing fellowship in June) have been on IBR and have done Married Filing Separately since intern year, and I'm considering switching to REPAYE and Married Filing Jointly.
Some details:
Her:
Current federal debt: ~$345,000
2016 AGI: ~$190,000
Expected future AGI: ~$190,000
Eligible for PSLF in 2022
Current monthly federal loan payment: ~$1,750
Me:
Current federal debt: ~$360,000
2016 AGI: ~$42,000
Expected future AGI: ~$190,000
Eligible for PSLF in 2022
Current monthly federal loan payment: ~$75
From a tax standpoint, this year if we file jointly, we'll save around $6,000 if we file jointly compared to filing separately.
For estimates going forward, I used the Repayment Estimator on studentloans.gov, and came up with the following assuming an AGI of $190,000 for each of us. We have two kids, so a family size of 4.
So, if the calculator there is reliable (is it?), we would save ~$1,000/month on student loan payments, and get the tax benefits of married filing jointly. In terms of drawbacks of REPAYE, I know there is no longer a cap on the monthly payment, but it looks like we would need a combined AGI of around $600,000 before our REPAYE payment would get to the standard repayment, and I don't see our AGI being that high anytime soon.
One more consideration. Here's what I came up with if we use our 2016 AGIs and switch to REPAYE now:
--Me: $827/month
--Her: $791/month
Total: $1,618/month
My conclusions/plan:
1. File taxes now as Married Filing Jointly, and plan to file jointly going forward.
2. Switch her to REPAYE now (lowers her current monthly payment).
3. Switch me to REPAYE in ~October at the time of IBR recertification (would keep my payments at $75/month until then).
I had been so used to IBR with Married Filing Separately being the clear winner for us that I didn't give the REPAYE program a hard look until now. But for a two physician couple going for PSLF with high debt and in low paying specialties, it seems like the clear winner. Right? Please let me know if I'm missing something. I would greatly appreciate any feedback / thoughts on the above plan.
My wife (attending for 1.5 years) and I (finishing fellowship in June) have been on IBR and have done Married Filing Separately since intern year, and I'm considering switching to REPAYE and Married Filing Jointly.
Some details:
Her:
Current federal debt: ~$345,000
2016 AGI: ~$190,000
Expected future AGI: ~$190,000
Eligible for PSLF in 2022
Current monthly federal loan payment: ~$1,750
Me:
Current federal debt: ~$360,000
2016 AGI: ~$42,000
Expected future AGI: ~$190,000
Eligible for PSLF in 2022
Current monthly federal loan payment: ~$75
From a tax standpoint, this year if we file jointly, we'll save around $6,000 if we file jointly compared to filing separately.
For estimates going forward, I used the Repayment Estimator on studentloans.gov, and came up with the following assuming an AGI of $190,000 for each of us. We have two kids, so a family size of 4.
Married filing separately, IBR:
--Me: $1,919/month
--Her: $1,919/month
Total: $3,838/month
Married filing jointly, REPAYE:
--Me: $1,463/month
--Her: $1,400/month
Total: $2,863/month
So, if the calculator there is reliable (is it?), we would save ~$1,000/month on student loan payments, and get the tax benefits of married filing jointly. In terms of drawbacks of REPAYE, I know there is no longer a cap on the monthly payment, but it looks like we would need a combined AGI of around $600,000 before our REPAYE payment would get to the standard repayment, and I don't see our AGI being that high anytime soon.
One more consideration. Here's what I came up with if we use our 2016 AGIs and switch to REPAYE now:
--Me: $827/month
--Her: $791/month
Total: $1,618/month
My conclusions/plan:
1. File taxes now as Married Filing Jointly, and plan to file jointly going forward.
2. Switch her to REPAYE now (lowers her current monthly payment).
3. Switch me to REPAYE in ~October at the time of IBR recertification (would keep my payments at $75/month until then).
I had been so used to IBR with Married Filing Separately being the clear winner for us that I didn't give the REPAYE program a hard look until now. But for a two physician couple going for PSLF with high debt and in low paying specialties, it seems like the clear winner. Right? Please let me know if I'm missing something. I would greatly appreciate any feedback / thoughts on the above plan.
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