Married Interns - IDR and taxes

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OnlyOneZlatan

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My wife and I just got married and will begin intern year in a couple of days. We are completing our W4s for the year and want to confirm what we think we know about this process and IDR that we've qualified for.

Because we had $0 income for the last year, we decided to apply for REPAYE before we were legally married and were accepted allowing us to have a $0/mo for the next 12 months. This allows us to have 1/2 of our interest covered for at least the next 12 months. However, since we will both have a resident income this year, it sounds like PAYE is the way to go for the next few years? This would let us have lower monthly payments than if we were to reapply for REPAYE?

And for the sake of our taxes and while we are in PAYE (and I guess when we become attendings?), I am also assuming we should file "married filing separately" so that our monthly loan repayments are lower. How negatively will this affect our taxes and withholding? Would the balance of lower loan repayments offset the taxes so that this works in our favor?

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Might wish to remain in REPAYE for the length of your residency to mitigate the interest accrual. Paye does not offer the 50% interest subsidy on any interest accrual. If it is your expectation that you will aggressively pay down your debt when you become an attending, your currenr primary goal maybe to mitigate your interest accrual by using repaye. Another benefit with repaye is it encourages you to file jointly which will likely lower your tax liability versus filing separately.
 
Can't give advice without knowing your goal. Is your goal to minimize payments, maximize PSLF, minimize total size etc. Will you work for a 501(c)3 or not after residency.

Be aware that technically when your income goes up you're supposed to report that. In practice, I don't think very many docs are voluntarily doing that.
 
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Can't give advice without knowing your goal. Is your goal to minimize payments, maximize PSLF, minimize total size etc. Will you work for a 501(c)3 or not after residency.

Be aware that technically when your income goes up you're supposed to report that. In practice, I don't think very many docs are voluntarily doing that.

So glad that the man himself is replying to me. My goal is to minimize payments since my residency program does not pay very well, then work immediately after I graduate residency, refinance with a private loan company like DRB once I graduate, aggressively pay down our loans within a few years - all without using PSLF since I hear it does not fully forgive my (our) debt (and I don't believe my residency program is non-profit as of a couple years ago). While I could see myself working at a 501c3, I don't want to limit myself to that just to take part in PSLF.

While I do know REPAYE is great for that subsidy on our unsubsidized loans, I know that once my wife and I become PGY2s we will have an income to report, meaning we will have a much higher monthly payment than if we were to take part in PAYE (I hope I have this correct). And once we become attendings, or at least when one of us does, the cap from PAYE will help minimize our monthly payments... unless it's better to privately refinance even if my wife chooses to go into fellowship. (So many variables, but I am assuming we both graduate residency and attempt to find work)
 
Your situation is complicated enough that it would be worthwhile to get professional advice:

Student Loan Advice

But I think the right answer for you is going to be refinance all private loans now, REPAYE for both of you for direct loans, filing married filing jointly, then refinance your direct loans as soon as you have a contract in hand. But I haven't run your numbers and it is possible it could make sense to refinance your direct loans during residency if you are no longer getting a REPAYE subsidy after your first year.

Seriously, if I were you I'd pay for advice on this one. It won't cost much and it could make a very large difference.
 
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