I have read all through this site and learned so much! I am having a hard time finding examples of anyone in my situation. I recently got married and am trying to figure out how our filing status will affect my student loans. I will post my facts below and would appreciate any advice more than you can know!

-I have approx $90k in student loan debt, $40k is consolidated through the federal program
-I am in the IBR plan and my current payment is going up from $69 per month to $283 per month due to wage increases and fortunately/unfortunately my wage will keep going up
-My other student loans (private) are $181 per month and $214 per month. All 3 combined are getting out of control
-I just found out that the hospital I work for is indeed a non-profit so I will be applying for the PSLF
-I live in Wisconsin which is a community property state
-My husband does not have any student loan debt
-My husband earns about $30k while I earn $60k

My main question is would it benefit us to file jointly?
Would my AGI then be considered lower because he earns less than I do and we live in a community property state?
Thank you all for your time, you can’t understand how much it means to some one just trying to make a go of things in this economy.

Here’s an example of how things can go for married folks in a community property state.  Wife earns $50K, husband earns $25K.  If they file separate federal tax returns, BECAUSE THEY LIVE IN A COMMUNITY PROPERTY STATE, each spouse’s AGI is 50% of their community income of $75K ($35K for each in this example), and each spouse’s income-driven student loan payment would be based on that $35K UNLESS they submitted an Alternative Documentation of Income form to establish their individually earned incomes.  Make sense?

Oh and here is IRS Publication 555 that explains the community property tax thing: http://www.irs.gov/pub/irs-pdf/p555.pdf
and a Wisconsin specific resource: http://revenue.wi.gov/pubs/pb113.pdf

Heather - 03 April 2014 09:57 PM

Here’s an example of how things can go for married folks in a community property state.  Wife earns $50K, husband earns $25K.  If they file separate federal tax returns, BECAUSE THEY LIVE IN A COMMUNITY PROPERTY STATE, each spouse’s AGI is 50% of their community income of $75K ($35K for each in this example), and each spouse’s income-driven student loan payment would be based on that $35K UNLESS they submitted an Alternative Documentation of Income form to establish their individually earned incomes.  Make sense?

Oh wow, I was under the impression that you would HAVE to provide the “Alternative Documentation of Income” if you lived in a community property state. For instance, in this application form for IBR (https://www.acs-education.com/CS/media/documents/IBR_Application_c.pdf) it states this:

“Important Notice: If you are married, do not file a joint federal tax return with your spouse, and live in the community property states of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, please provide the Alternative Documentation of Income specified in Section 5.”

Heather, in this case, is providing alternative documentation of income still optional (i.e. it says “please provide Alternative Documentation of Income,” but you still can submit the married filing separately tax return if you want to, instead?), or if the loan servicer says this, do you HAVE to submit alternative documentation?

I was just looking at the Income-Based (IBR)/Pay As You Earn/Income-Contingent (ICR) Repayment Plan Request on StudentLoans.gov, and found the answer to my question there. Here’s what the request has to say about it, under Section 9, Eligibility Requirements:

“IMPORTANT INFORMATION ABOUT ALTERNATIVE DOCUMENTATION OF INCOME

YOU ARE REQUIRED to provide alternative documentation of your income if:
- You did not file a federal tax return for the either of the two most recently completed tax years; or
- You have been notified by your loan holder(s) that alternative documentation of your income is required.
 
YOU MAY provide alternative documentation of your income if your Adjusted Gross Income (AGI), as reported on your most recently filed federal tax return, does not reasonably reflect your current income, because, for example, the loss of or change in employment by you or your spouse.
 
YOU ARE NOT REQUIRED to provide alternative documentation of your income if you can provide a copy of your most recently filed federal tax return or an IRS tax return transcript from either of the most recently completed tax years; and that documentation reasonably reflects your current income.”