First, thanks for this amazing forum of information.  Very helpful!

My question has to do with the timing of an initial IBR application in light of the following factors:

- starting new IBR/PSLF job soon, before April 15
- married last year, so this will be the first year I could file married (jointly, or separately).  Uncertain which way I will file, but likely jointly. 

So, if I submit my IBR application before I file for taxes, do I have to answer the question below in the affirmative?  I was uncertain because the timing is going to be tight (i.e. apply for IBR early April, and potentially file taxes jointly a week later).  And I’m not completing Section 3, so that’s irrelevant.

Section 5, Question 11 of the IBR application states:

11. If you are married and completed Section 3 or file a joint federal income tax return with your spouse, does your spouse have taxable income? Check “No” if (1) your spouse does not have any income, (2) receives only untaxed income (such as Supplemental Security Income, child support, or federal or state public assistance), or (3) is not required to file a federal income tax return based on the amount of his/her taxable income.

Yes – Provide documentation of your spouse’s income, as described below.
No – By signing this form, your spouse is certifying that he/she has no taxable income or is not required to file a federal tax return based on the amount of his/her taxable income.

The question reads oddly, but it seems you should simply not answer it if the first two conditions fail to apply.  In my mind, because I will not have yet filed jointly, I don’t yet “file a joint federal income tax return,” even though I will file a joint return a week later.  If I do have to answer because I intend to file jointly for our 2014 taxes, then my IBR payment is going to increase by the amount of my spouse’s income for the year. 

Hope this makes sense… and thanks in advance for any insight you can give!

One thing I have discovered since being in IBR, is the beauty of having your IBR renewal deadline between Jan-April. You can pick and choose whether you want to hold off filing taxes until after you’ve applied or renewed for IBR, and use the previous year’s information for your IBR, or file your taxes THEN apply/renew IBR and use this year’s information. And you can get yourself into this window (if you’re not already) but re-submitting income documentation during this time. I only discovered this because I thought I would be responsible and resubmit my documentation in February for my May renewal (I figured I just did my taxes, might as well see what my new payments are going to be so I can plan accordingly) and the servicer changed my new higher payment to begin in March instead of May! I called and argued with them, that I was entitled to 12 months payment at the lower rate, and they said “sorry this is our policy!” I even began to argue that this would allow me to pick and choose when to file taxes (pre or post IBR renewal) and I thought to myself “shut-up shut-up shut-up :)” In 2015, my income is going to double what I made in 2014, but since my servicer decided to move up my deadline, I can simply hold off filing taxes, renew IBR in February 2016, and use my 2014 taxes since technically I wouldn’t have filed 2015 yet. Sure, it’ll catch up to me the following year, but what if I end up making less? (Which will happen in my case, my income is doubling due to alimony, which will be over by 2016) Then in 2017, I’ll file 2016 taxes THEN apply for IBR. This is not untruthful or fraudulent, I just happen to be in the magic window where I can pick and choose the lower income within 2 year’s time. Eventually, my finances will even out. This strategy is useful for people during times of fluctuating incomes due to marriage, divorce, job change, etc, like the person who posted above.  It does not help people who make roughly the same year-in-year-out.

My point is, in your case, the big dumb servicers want your most current tax returns to calculate your payment. Choose carefully what day to submit income documentation. If you submit IBR on April 1st, 2015 and havent filed your 2014 taxes yet, then it is completely accurate and truthful to use your 2013 tax returns and use that AGI for purposes of calculating IBR. It doesn’t matter that you file your taxes with your husband the following day and your income doubles. During tax time/IBR renewal 2016, you can decided which year you made less money, either 2014 or 2015, and flip flop your IBR renewal and tax filing dates accordingly.