Should we file taxes married jointly or separate with student loans on PSLF?

Filing separately is often the right move when you're pursuing PSLF, but it's worth running the numbers both ways now that you have a child in the mix. For PSLF with income-driven repayment plans, filing separately can significantly reduce the monthly payment for the spouse with the loans since only their income counts. However, filing separately comes with several tax disadvantages: you can't claim certain credits like education credits, child and dependent care credit, and you lose some deduction opportunities. With a new baby, you're potentially leaving money on the table with tax credits like the Child Tax Credit. The best approach would be to calculate your taxes both ways and compare the tax savings of filing jointly against the increased student loan payments over the remaining 40 months until forgiveness. If your husband is the only one on PSLF, and you're the higher earner, you might consider having him claim the child as dependent if you file separately. Also, consider which income-driven repayment plan your husband is on - some plans like REPAYE will count spousal income regardless of filing status, while others like IBR and PAYE don't when filing separately.

After struggling with a very similar situation last year (PSLF, new baby, trying to decide between MFJ and MFS), I found an amazing tool at https://taxr.ai that completely changed how I approached this decision. Instead of guessing or trying to manually calculate everything, I uploaded our previous returns and added our new baby info. The tool analyzed both filing statuses considering student loan impacts AND all the tax credits we'd be eligible for with our new baby. It showed us that in our case, filing separately still saved us about $4,200 annually in student loan payments while only costing us about $1,800 in tax benefits - so a net win of $2,400 by filing separately. What I really loved is that it calculated the PSLF forgiveness timeline impact too - not just the immediate tax year consequences. Might be worth checking out since your situation has so many moving parts!

Just wanted to follow up after trying the taxr.ai site recommended above. Honestly, I was blown away by how helpful it was for our situation. My wife and I also have a PSLF situation with a toddler, and I've been stressing about this exact question. The analysis showed us that MFS would save us about $3,800 in student loan payments over the year but cost us around $2,100 in tax benefits - still coming out ahead by filing separately. It also calculated the remaining lifetime value of the PSLF benefit which really put things in perspective. What sold me was how it walked through exactly which credits we'd lose with MFS and which spouse should claim our child to optimize everything. No more guesswork! Definitely worth checking out if you're dealing with this PSLF/filing status headache.

If you're still having trouble getting a clear answer on this, I've had great success using Claimyr (https://claimyr.com) to get through to actual IRS agents who can advise on complicated situations like yours. After spending weeks trying to research this exact scenario (PSLF + new baby + filing status), I was going in circles. Claimyr got me connected to an IRS representative in under 20 minutes when I'd previously waited for hours and got disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how the different filing statuses would affect my tax situation with my specific student loan circumstances. She even pointed out some special considerations for PSLF that I hadn't found in any of my online research. Completely worth it for the peace of mind on such an important financial decision.

I need to eat my words and apologize for my skepticism about Claimyr. After reading about it here, I decided to try it since I was getting nowhere with my own research on a similar PSLF/filing status question. Got connected to an IRS representative in about 15 minutes (after previously trying for DAYS to get through). The agent actually specialized in education credits and loan forgiveness programs and gave me incredibly specific advice about my situation. She explained exactly how the Child Tax Credit would work with MFS vs MFJ in my case, and helped me understand how the numbers would work over the remaining life of the loan. She even sent me follow-up materials about a special exception that might apply in my case that I never would have found on my own. Completely changed my filing strategy for this year. Wish I'd known about this service years ago!

As someone who went through the exact same scenario (PSLF, new baby, deciding on filing status), here's what I learned after a lot of research and calculations: 1. Run the numbers for BOTH scenarios. Calculate your total tax liability filing jointly vs. separately, then calculate the difference in student loan payments over 12 months. 2. Remember that filing separately disqualifies you from: student loan interest deduction, education credits, earned income credit, child and dependent care credit, and reduces your IRA contribution limits. 3. With a baby, the Child Tax Credit is substantial ($2,000), but both MFJ and MFS can claim it. 4. If your husband is only 40 payments away from forgiveness (about 3.5 years), consider the total savings over that period. Sometimes paying a bit more in taxes is worth the significant reduction in loan payments. 5. If you file separately, typically the higher earner should claim the child, but run the numbers both ways. Pro tip: Create a spreadsheet tracking this year by year. Our situation changed dramatically when our second child arrived!

Has anyone actually calculated how big the difference is between filing jointly vs separately with student loans on PSLF? Like actual numbers? My wife and I were in this exact situation and we figured the lower student loan payments would easily outweigh any tax benefits from filing jointly. But after actually calculating everything, we were shocked! Filing separately saved about $280/month on student loan payments ($3,360/year) but cost us around $4,100 in additional taxes and lost credits! We've been losing money for years by filing separately! Do the math carefully with your specific numbers!!

This is such a complex situation that really depends on your specific numbers! I went through something similar last year with my spouse on PSLF and our first baby. A few key things I learned: 1. **Income-driven repayment plan matters**: Since your husband is on IBR, filing separately will indeed keep his payments lower since only his income counts. If he were on REPAYE, spousal income would count regardless. 2. **Child Tax Credit strategy**: The $2,000 Child Tax Credit is huge, but you need to decide who claims your daughter. Generally, whoever has the higher tax rate benefits more from claiming the dependent, but with PSLF you might want to keep your husband's AGI lower. 3. **State tax considerations**: Don't forget to factor in state taxes - some states don't allow separate filing or have different rules. 4. **40 payments left is key**: Your husband is getting close to forgiveness! That's roughly 3.5 years of payments. Calculate the total student loan savings over that entire period, not just one year. My recommendation: Create a spreadsheet comparing total costs (taxes + loan payments) for both scenarios over the next 3-4 years until forgiveness. The math might surprise you either way! Also consider consulting a tax professional who understands PSLF - the intersection of tax strategy and loan forgiveness is tricky, and the stakes are high with your income levels.