I'm a married fourth year medical student with a question about tax filing status impacting the income-driven repayment plans.
My spouse makes ~$40,000, and doesn't carry any student loans. We have been filing jointly to take advantage of the tax breaks during medical school, and are planning to do so for 2017 as well. Unfortunately, I will graduate with about $400,000 student loan debt at around 6.5% (all direct federal, no private loans). I will be in training for ~6 years total, and am entering a moderately high-paying specialty.
My spouse makes ~$40,000, and doesn't carry any student loans. We have been filing jointly to take advantage of the tax breaks during medical school, and are planning to do so for 2017 as well. Unfortunately, I will graduate with about $400,000 student loan debt at around 6.5% (all direct federal, no private loans). I will be in training for ~6 years total, and am entering a moderately high-paying specialty.
Because of my high debt load, long training period, and my spouse's relatively modest salary, we will be looking to do some form of IDR and seek PSLF rather than refinancing and trying to pay off the debts quickly.
(1) If we file jointly for 2017, will I have to include my spouse's income in the IDR calculations assuming I enroll in an IDR plan in 2018? Would we then be able to file separately in 2018 and have her income excluded?
(2) I know it is generally it is advantageous to file jointly for married couples because you're subject to a lower effective tax rate. However, with this much debt and a low tax burden overall, it seems like filing separately would be advantageous in my case. Using a couple calculators and some rough numbers, it seems like PAYE is the lowest monthly payment and would go from $589 if filing jointly, to $308 if filing separately. Further, filing our taxes separately would only increase our tax burden by about $300 ($300 cost for $3,372 savings yearly). Am I missing something big here?
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