@Duon wrote:
And also how do I deal with the floor rule?
There are a number of important limitations to filing MFS and it usually results in higher taxes, since many deductions and credits are reduced or disallowed, especially if you start having kids. It would take a lot more math than I have time to do to figure out whether the lower payments are worth the higher taxes in the long run.
One limitation is that if one spouse itemizes, both must itemize. You can't load all the deductions on one spouse and have the other spouse use the standard deduction. This is even more true in a community property state, where you must split all the deductions 50/50, even if it is bad for one of the spouses to file that way.
The IBR/MFS dilemma is more complicated than it seems and it is not easy to calculate the best answer for a family, especially since loan forgiveness programs are always changing. If you will not be eligible for loan forgiveness, filing MFS to get lower payments is probably a losing proposition. If you will be eligible for some type of forgiveness, then maybe it would save more in the long run by paying higher taxes to get a lower payment until you qualify for forgiveness. But also remember that most forgiven loans are considered taxable income in the year the loan is forgiven.
https://turbotax.intuit.com/tax-tips/college-and-education/can-debt-forgiveness-cause-a-student-loan...
This answer has been verified for accuracy by an Intuit expert employee
