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Old 07-09-2014, 11:41 PM
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Filing separate for purposes of IBR

Hello everyone, I am new to this forum, I have 3 important tax related questions about filing separate tax return to lower my loan payments under IBR.

1. I found out that the student loan repayment under IBR is higher for those who file as married filing jointly. Is it legal for me to file my tax return as married filing separately in order to lower my student loan repayment under IBR?


2. When should I begin to file separate tax return in order to apply for IBR? Should I do this once I complete graduate school or while I am in graduate school?


3. Once I pay off my student loan under IBR can I start again to file my tax return as married filing jointly in order to get back the losses of credits from American Opportunity Credit or Lifetime Learning Credit?

Thanks.

Newbie37



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Old 07-10-2014, 11:09 PM
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Originally Posted by Newbie37 View Post
Hello everyone, I am new to this forum, I have 3 important tax related questions about filing separate tax return to lower my loan payments under IBR.

1. I found out that the student loan repayment under IBR is higher for those who file as married filing jointly. Is it legal for me to file my tax return as married filing separately in order to lower my student loan repayment under IBR?


2. When should I begin to file separate tax return in order to apply for IBR? Should I do this once I complete graduate school or while I am in graduate school?


3. Once I pay off my student loan under IBR can I start again to file my tax return as married filing jointly in order to get back the losses of credits from American Opportunity Credit or Lifetime Learning Credit?

Thanks.

Newbie37
I found out that the student loan repayment under IBR is higher for those who file as married filing jointly. Is it legal for me to file my tax return as married filing separately in order to lower my student loan repayment under IBR==============>>>>>>>> If you are having trouble paying your federal student loans, you may be eligible for programs that will get you lower student loan payments. IBR will always be lower than the 30-year extended payment, especially with a high balance and low income. There is a marriage penalty inherent in income-based repayment. Yu as a Married borrower, have a choice. If you choose to file federal income tax returns as MFS, you can have only your individual income counted for income-based repayment. But then you will lose some of the tax benefits available to borrowers who file joint returns, including the student loan interest deduction. If you choose to file federal income tax returns as MFJ, the combined income is counted for income-based repayment, yielding a higher monthly loan payment. you must consider the financial impact of each approach before deciding whether to file separate or joint federal income tax returns.If you and spouse file federal income tax returns as MFJ jointly and both have elected to repay your loans under the income-based repayment plan, the monthly loan payment is split between the spouses’ eligible loans in proportion to each spouse’s share of the total eligible loan debt.So, You need to understand the NEGATIVE tax implications of not filing jointly.


2. When should I begin to file separate tax return in order to apply for IBR? Should I do this once I complete graduate school or while I am in graduate school?=================>>>>>>>>once you complete grad school; After you have graduated or left college, it’s time to repay your student loans.

Note;as of Dec. 21, 2012, recent college graduates with federal student loans can apply to lower their monthly payments using the Pay As You Earn plan. This new repayment plan has a lower monthly payment cap than the more widely available IBR plan. Pay As You Earn also provides forgiveness after 20 years of payments, rather than 25 years in IBR. President Obama recently proposed expanding Pay As You Earn to federal student loan borrowers who took out loans before October 2007 or those who stopped borrowing by October 2011.


3. Once I pay off my student loan under IBR can I start again to file my tax return as married filing jointly in order to get back the losses of credits from American Opportunity Credit or Lifetime Learning Credit
-=============>>>>>>>>>of course; filing your tax return status is up to you;the determination is mostly affected by what your marital status is on the last day of the year.as you know, it is important to know which filing status applies to you and how it will affect the amount of taxes you could owe



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