Post # 1
ok, i know maybe i should contact a tax professional, but i thought some bees might have some advice so ill ask here!
i have student loans and i am trying to keep payments low so and stay on income based repayment. my new DH and i are about to file taxes, and we had planned to file married/separate for this reason. but we just found out that if one of us itemizes, the other has to itemize as well.
i havent ever itemized anything in the past, and he has always itemized.
he always itemizes because of interest he pays on mortgage, he itemizes car tag payments, and i dont know what else because he always has his dad do his taxes. i havent saved any receipts for anything, and i dont think i have anything to itemize anyway.
so my question is, can he NOT itemize even if he has all sorts of things like mortgage interest to claim, OR can i itemize if i dont have anything really to claim (or receipts for that matter)? one of us has to do it the other way so that we both do it the same way, but i dont know if he can NOT itemize and i dont know if i CAN.
And if we just say screw it and file jointly, i know the income i have to report to my student loan lenders will make my payments either double, or make me not qualify for income based repayment at all. which is the worst case scenario because my standard payments would be about the same as a mortgage payment.
what should we do? do we have options as to whether we itemize or not?
Post # 3
I’m going through a similar situation (DH is on IBR for law school, and I am on a standard 10 year plan for grad school), and trying to figure out what’s best.
Something else for you to consider: when you file separately, you are no longer eligible for deductions relating to tuition or student loan interest (as well as a bunch of child care credits, dependent credits, earned income credit, or other education credits).
We are going to play with the numbers both ways – finding out our AGI with a joint return and his individual AGI with a separate return, and calling his loan company to find out the best way to go. His company said if we call with the AGIs, they can put the numbers in their formulas to ensure we’d still qualify for IBR, or to minimize the payments (because, like you, our payments are already high – in the four figures – and going up more would really, really suck).
The best advice is, of course, to go see a CPA or tax professional to figure out the best outcome for you.
ETA: Re: Itemization: there are limits in place that are supposed to decide if you itemize – I think it’s around $6k for singles and $12k for married couples. If your deductions don’t meet that, it’s going to hurt you (meaning, you’re not getting the full deduction that you previously have by using the standard deduction since you’re now itemizing deductions).
Post # 4
@abbie017: basically it only makes sense to itemize if your itemized deductions would be MORE than the federal standard deduction, correct??
Post # 5
@highschoolhoneys: That’s my understanding. I’m not a tax person at all, though. This is just what I’ve picked up by dealing with this student loan crap! 🙂
Post # 6
@BeeG35: there are other ways to lower your loan payments without doing income based repayment. Graduated repayment lowers it as well. just something else to look into.
@highschoolhoneys: i believe this is correct.
Post # 7
If you are “married filing single MFS” there are restirctions on what you each can itemize (which are not the same things as a single person): http://taxes.about.com/od/filingstatus/qt/marriedseparate.htm
MFS taxpayers are not eligible to claim the following tax benefits:
So if your H typically had any of these things on his itemization list as a single person, he cannot deduct them as MFS. It looks like he can still itemize his mortgage if MFS, but double check that with a tax person.
Were his itemizations as a single person less than $12,200?
Post # 8
@sienna76: ooh ok, so some things he might not be able to itemize as before. well, i dont think they would add up to be that much, but i cant say for sure. we r waiting on his dad to calculate his taxes both ways so that we can see what the difference is. IF he can calculate both ways.
i just didnt know if i COULD itemize with nothing to deduct and certainly no reciepts if there was anything. And i dont know if he can NOT itemize with all the things he pays interest on and deducts.
however, i played around on turbotax today to see what it would do and of course it told me that i cant take the standard if the spouse itemizes. so i selected itemize and it asked me all the questions, but they were all answered no and all the amounts were 0 all the way down. it gave me a total amount of itemized deductions but i have no idea how it came to that number. it looks like i would still get a refund, but it would be about $1000 less than if i took the standard.
maybe i should call my lenders and have them calculate my payments if we filed married jointly. maybe it wouldnt be as bad as i think, but the payments would have to be doubled since FI and i bring home about the same amount.
we will see, i guess.