I combed through the forums looking for an answer- but havent found one yet.  Maybe you guys can help.

So when I consolidated my loans ($140,000), I started on IBR and my payments were $110 a month (my income was about $32,000 a year.  I took a new job and recertified- my income rose to $42000.  My husband and I have filed our taxes as “Married filing separately.”  He has about $25000 left on his student loan that we have been paying on. His income is about $75000 a year (before taxes). He is behind in his student loan payments (which are $400 a month).  When I did the IBR repayment calculator, our payments were going to be over $900 a month, which is why we have been filing taxes separately. 

I am taking a new job where the income is $58,000 and moving, with my husband and son to follow.  My husband does not yet have work, so we anticipate his income being substantially lower. Maybe even half of what he is making now. 

My questions:
1.  Given that this coming year, we will be essentially leaving on a fraction of our current income, should we file this year’s taxes as separately and then next year jointly? I am afraid that if we file jointly, my student loan bill is going to shoot up over $900 again. 

2.  Do most couples find that the benefit to filing separately outweigh the costs?  Obviously, we cant get a lot of the tax credits that we should be eligible for (child care tax credit, etc.)

Any help is appreciated.

All good questions.  There just aren’t any “most couples”.  It’s really situation specific and the only thing you can do is run the numbers.  I suggest that you prepare both joint and separate federal tax returns, see what the tax hit is, calculate what would happen to your IBR payment using each of the different income numbers, and compare the benefits. 

You are thinking about the right considerations and here are a few additional thoughts:

If you file jointly, your payment will be based on your joint income unless or until you can demonstrate that your tax filing does not accurately reflect your actual income.  You may request that your payment be recalculated and submit an Alternative Documentation of Income form with accompanying documents when there is an income change.  Also, you can decide each year what is best from an income tax standpoint.