So here is a complicated question... We were planning on getting married in two months but have found some draw backs and it could possibly hurt us financially in a big way. So I need some advise...
So she has gotten a job as a student councilor at a local high school. Due to being a public school, she can get her 67K of federal student loans forgiving after paying the loans for 120 consecutive payments or 10 years. If we file married filing separately or stay single this will equate to a total of 52K. This is only if you use a graduated or income based payment plan. So with these loans she will pay $2500 interest a year for the first 10 years. However from what I found out, if she claims single she could deduct the interest. If she files married, filing separately then she can not deduct the student interest.
So when we throw my income into it as a married couple with a joint return, she would be required to pay student loans off within 10 years with no forgiveness. I also own a house, pay property tax and mortgage interest. SO the question would be, if we are married, filing separately, would we lose anything else besides just the student interest on the her loans.
So the way I figured it out
Filing jointly- Cost us about 78K more in principle + interest in student loans
over 15 more years
Married Filing Separately- 2500 in student loan interest- 25K...
Staying Single- I don't think we would gain any thing with marriage standard deductions ....
So whats the point of getting married these days?
Sat Jul 23, 2011 3:28 am
coaster Senior Advisor
Cash: $ 1626.30
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I'm a big fan of using tax software to do tax-planning scenarios. Instead of relying on the information and rough guesses you have so far, why not spend a few dollars on TurboTax, then create one separate tax return for each of your scenarios, plug in all the numbers you have into each separate scenario, and have some black and white dollars and cents to make your decision on.
That being said, I think the point of getting married is about more than just money.
But.....it's a shame the tax code has to get in the middle of that.
Sat Jul 23, 2011 6:52 am
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Joined: 09 Feb 2009
Another idea would be to pay off the school loans in 5 years which would be around 13k a year and you would pay a ton lower interest, plus you can deduct the payments you make on your loans you pay on your taxes.
Risk comes from not knowing what you're doing. (Warren Buffet)