NWR: tax savvy bees! can you answer my question??

posted 3 years ago in Money
Post # 3
Member
11712 posts
Sugar Beekeeper
  • Wedding: November 1999

@BeeG35:  

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
Member
920 posts
Busy bee
  • Wedding: June 2015

@abbie017:  basically it only makes sense to itemize if your itemized deductions would be MORE than the federal standard deduction, correct?? 

Post # 5
Member
11712 posts
Sugar Beekeeper
  • Wedding: November 1999

@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
Member
11668 posts
Sugar Beekeeper
  • Wedding: November 1999

@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
Member
6073 posts
Bee Keeper
  • Wedding: August 2012

@BeeG35: 

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?

 

 

 

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