Taxes w/ Working Spouse in Medical School

[hanesgrafe]

I will start medical school in July of this year and my wife will start a lower paying job ($35,000-$50,000) and will likely continue in this job until I graduate. I am looking for any tips regarding how to reduce the amount we owe in taxes each year as well as general advice for a good approach to our finances while I am in school.

[SerrateAndDominate]

Assuming she is W2, there won't be a ton you guys can do. The standard deduction should help out a lot.

As for general advice as a student in that situation, budgeting will go a long way. Try to avoid taking out more loans than necessary. Outside of that, the best thing y'all can do is communicate and be supportive of each other. When you're in med school, those stressors will carry over to her as well.

Good luck!

[jfoxcpacfp]

Regarding how to reduce taxes - you’re already doing it by your wife working a relatively low-paying job. Your question, impo, should really be framed from an income rather than tax perspective, and how to stretch your dollars. The top suggestion I would give is to hold off on having kids. However, in a few years, the answer to your question will really matter.

Good luck and welcome to the forum - hope you hang around!

[CordMcNally]

You aren’t going to owe much, if any, in taxes.

Focus on budgeting and doing more with less. That’ll serve you well in a lot of aspects of life.

Oh yeah, do well in school so you keep as many options open as possible.

[bovie]

Roth IRA, if you can.

You focus on school. Wife should focus on obtaining a higher paying job, if possible.

That will make much more of an impact than minimal tax savings on relatively low income.

[JBME]

Live lean. If you have to take out student loans, only take out for tuition. Your wife's income should cover 100% of your housing, utilities, gas, and food. If it doesn't, you all are spending too much. In addition to covering 100% of your living costs, with your wife's income you all should be able to put $6500 in a Roth IRA for her and another $6500 in a Roth IRA for you. Honestly if you can just do this, and basically live off of $22k-$37k that will go a long way towards forming good money habits.

Heck, as I wrote out that $22-37k range I actually think if your wife has access to a workplace-provided Roth 401k, she should contribute to that as well, beyond the match. Actually she should contribute to her 401k/Roth 401k minimally to get at least the employer match. Granted it was long ago but we lived in a HCOL area and when my wife was in med school I was making $30-$50k and did the Roth IRA contributions. That was it, as I was a contractor who was young and wasn't aware of individual 401k plans at the time.

[wideopenspaces]

My husband was right in that range as well when I started medical school. We lived off his income and only took loans for tuition. That's the main financial goal I would try to achieve. I did have a baby after 3rd year and figuring out childcare was difficult. This was 15 years ago. I think you'd have to take out loans for childcare given how expensive it is now so keep that in mind for any family planning. Congratulations and good luck!!