@agoke - do the math both ways:
1) file joint: what is the tax and what is the student loan payment?
2) file separately: what is the tax and what is the student loan payment?
assuming no children:
1) a Married - filing joint return with a $60,000 income yield tax of $4349
2) a Married - filing Separte return with a $60,000 income yields tax of $5466
the difference is $1117
If you are on a repay plan, the new plans that kick in this summer would be something like this:
Filing Joint: Federal poverty level: $19,000 * 2,25 = $42750, and the difference from $60,000 is $17250, so the payment would be limited to no higher than 5% of that or $862 per year
Filing Separate, since you have no income, the loan payment would be zero.
So if you file Separate, the tax is $1117 higher and the loan payments are $862 lower - not worth it.
But if the repay plan was based on10% of the discretionary income or $1724 for the year, then it would make some sense.
one of the keys is whether you have children, as some of the tax credits become a challenge. Also, if you are expecting to take a tax credit for the trade school costs, you lose that if you file Separate as there is no educational tax credit eligibility when filing Separate. Also, the loan interest is not deductible when filing Separate.
CHECK MY LOAN CALCULATIONS WITH YOUR STUDENT LOAN SERVICER! as it may not be accurate
