I have filed married but filing separate for the first 2 years of my marriage to avoid paying a higher student loan monthly payment.  Is there a definitive way to determine if you will qualify for the IBR if you were to file jointly?  My spouse and I both have substantial student loan debt (although her’s aren’t in repayment since she is still in med school).  I understand that by filing jointly your spouses income is considered.  However your spouse’s student loan debt is also factored in.  So it seems that there may be some scenario’s where you may still qualify if both debt sources are high relative to the joint income.  Is it the case that you won’t know what the repayment decision will be until you actually make your filing status decision? 

I do realize it’s easy to see what the tax consequences will be by filing your taxes both ways, but I’m not seeing a clear cut way to know if you’ll qualify for the IBR before you file.  Just wanted to get more information since it seems you won’t be able to claim a good bit of deductions if you don’t file jointly.  Thanks.

Did you use the online IBR calculator (e.g. http://www.ibrinfo.org/calculator.php) ?  From my experience, IBR will take into account your spouse’s income and technically the debt, but still will basically just ignore your spouse’s debt and result in a much higher payment than married filing separately.

Snoman88 - 17 January 2014 11:03 PM

Did you use the online IBR calculator (e.g. http://www.ibrinfo.org/calculator.php) ?  From my experience, IBR will take into account your spouse’s income and technically the debt, but still will basically just ignore your spouse’s debt and result in a much higher payment than married filing separately.

Yes I used that one as well as another one.  When you say from your experience do you mean you had a similar situation?  If so would you mind sharing.  According to what you are saying that is pretty bad for them to claim to take both parties’ salaries and debt into consideration but really just ignore one parties’ debt.  It’s not like the debt doesn’t affect the other person.  Filing single is as far as repaying student loans but they hammer you by disqualifying you from tax deductions and credits.

I understand there’s not real way to know before you file but it seems as though they’d be willing to share what formula they use to make the determination.  I actually asked and was told they can’t provide that information

The formula is supposed to be in the calculator.  I guess there is no guaranty from internet calculators though. Also, it looks like you might really benefit from going back and amending your tax returns to MFJ to claim missed deductions.  I am trying to see if Heather Jarvis will weigh in on this practice in another post (http://askheatherjarvis.com/forums/viewthread/9044/).  This has also been discussed here: http://forums.studentdoctor.net/threads/ibr-and-married-filing-separately.898534/.  That would seem to solve your problems.  Obviously consult a tax professional before making any decisions about anything.