filing status student loans

Forum|Forum|3 years ago
August 30, 2022
1 reply
0 views

Can I file married separately with no income for purposes of ICR plan for student loan repayment? Spouse makes big income and I make 0. We have always filed married. Student loan payments begin and I have Parent Plus loans in my name. No loans in spouse's name. Also how do you split dividends/interest in joint account on separate returns?

DoninGA

Employee

If you have no income of any kind there is no need for you to file a tax return with a filing status of Married Filing Separately. Your spouse can file their return as MFS and any interest earned can be entered on their tax return.

However, filing MFS is usually the worst way for file when married. See this TurboTax support FAQ for filing separately - https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/better-married-couple-file-jointly-separately/L338QHg8G_US_en_US?uid=l7go7h4j

hdnguAuthor

I know MFS is worst way but if I have 400,000 in student loans and consolidate with 0 income by filing separately, my payment will be 0 and in 20 years will be forgiven, with a balloon tax payment hence a cheaper option. Right?

DoninGA

Employee

Correct, for now.

Just be aware that federal rules, regulations and the tax code can change at any time, so hanging your future on what is currently available for what may be available in 20 years is risky at best.