IBR Help w/ Married Filing Jointly

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BarbellDreams
Posts: 2256
Joined: Thu Mar 19, 2009 6:10 pm

IBR Help w/ Married Filing Jointly

Postby BarbellDreams » Mon Mar 09, 2015 11:29 am

I got married this year and have no clue what to do on the taxes. My wife and I both have monopoly-money loan debts. I heard that IBR combined your income but also takes I to account BOTH spouses debt in calculating IBR payments (we are both on IBR). So essentially the only people who should file separately are those that have only one spouse with a ton of debt and the other with zero. I'm hoping someone can confirm this.

My fear is that after I file jointly we are each gonna pay 15% from the TOTAL we made together. So for example let's say we each make 50K. If they combine our salaries to equal 100K but also combine our debt I'm cool with just paying 15% of 100k for both of us. By nightmare is filing jointly and then playing 15% of 100K for my loans and then another 15% of 100k on my wife's loans.

How does this work?

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Tiago Splitter
Posts: 15515
Joined: Tue Jun 28, 2011 1:20 am

Re: IBR Help w/ Married Filing Jointly

Postby Tiago Splitter » Mon Mar 09, 2015 12:15 pm

Looks like your concern was fixed in 2010:

http://www.ibrinfo.org/update_July12010.vp.html

Married Borrowers: When married couples both have federal student loans, they will no longer face higher IBR payments than their unmarried peers. For married borrowers who file their taxes jointly, lenders will factor in the couple's total federal student loan debt, as well as their total income, to calculate payments. Originally, IBR did not recognize that joint income has to cover both spouses' federal loan payments, resulting in payment requirements up to twice what two equivalent single people would have to pay.


There could still be a benefit to filing separately but filing jointly won't be the nightmare you imagine




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