{"id":307,"date":"2020-09-18T16:05:10","date_gmt":"2020-09-18T16:05:10","guid":{"rendered":"https:\/\/www.etax1099.com\/blog\/?p=307"},"modified":"2023-07-03T06:11:40","modified_gmt":"2023-07-03T06:11:40","slug":"benefits-student-loan-payments","status":"publish","type":"post","link":"https:\/\/www.tax2efile.com\/blog\/benefits-student-loan-payments\/","title":{"rendered":"Use the Right Filing Status to Benefit Student Loan Payments"},"content":{"rendered":"<p><span style=\"font-family: verdana, geneva, sans-serif;\">Taxpayers who recompense their student loan using ICR, IBR or PAYE repayment plan must be a little more cautious while filing their tax returns. Because the filing status of the tax returns you chose will affect your repayment plan.<\/span><\/p>\n<h2>Benefits Student Loan Payments<\/h2>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">When the taxpayers are married, they must decide whether to file the tax return along with their spouse using the status \u201cmarried filing jointly\u201d or just to keep the income separate by filing \u201cmarried and filing separately\u201d. This may alter their monthly payments. When you opt for a filing status instead of the other status will make your payments less expensive each month.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Student plan payment options, like income-based repayment, are determined based on your current household income and size of the family. Usually, this option will lower monthly payments than a standard repayment option.\u00a0 Income-driven repayment varies between 10 % to 20 % of discretionary income.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Discretionary income is calculated when the basic living expenses like utilities and rent are deducted. The loan holder will review your repayment plan every year and re-determine the monthly payment appropriately based on your tax return<\/span><\/p>\n<h3><span style=\"font-family: verdana, geneva, sans-serif;\">Instances of Income-driven Repayment Plans<\/span><\/h3>\n<ul>\n<li><span style=\"font-family: verdana, geneva, sans-serif;\">Income-Based Plan<\/span><\/li>\n<li><span style=\"font-family: verdana, geneva, sans-serif;\">Income-Contingent Plan<\/span><\/li>\n<li><span style=\"font-family: verdana, geneva, sans-serif;\">Pay as You Earn Plan<\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">The loan financer sets your monthly payment amount depending on the obtained information from your tax return. The factors that are important in determining your payment amount are your income, size of your family, and current debt amounts.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">When you are filing your tax returns under the status \u201cmarried and filing separately\u201d, then your loan provider considers only the income that you earn. When you file a joint tax return, your partner\u2019s (spouse) income is used to determine only the monthly payments. On the other hand, when your income is less than your partner, filing a separate tax return will lower your monthly payments significantly on an income-based repayment plan.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">This could be better explained with an example. Consider a married couple has 2 children. One of the couples makes $ 50,000 yearly, without any student debt loan. The other person makes $ 25,000 annually with a debt of $ 60,000 in student loans, which is being repaid through an Income Contingent Repayment Program (ICR). When the student person files a separate return, the payment could be lowered to $ 25 every month. Else, when they file a joint tax return, the monthly payment could rise up to $ 600 approximately.<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Taxpayers who recompense their student loan using ICR, IBR or PAYE repayment plan must be a little more cautious while filing their tax returns. Because the filing status of the tax returns you chose will affect your repayment plan. Benefits Student Loan Payments When the taxpayers are married, they must decide whether to file the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99],"tags":[],"class_list":["post-307","post","type-post","status-publish","format-standard","hentry","category-e-file-1040"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/posts\/307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/comments?post=307"}],"version-history":[{"count":2,"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/posts\/307\/revisions"}],"predecessor-version":[{"id":1789,"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/posts\/307\/revisions\/1789"}],"wp:attachment":[{"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/media?parent=307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/categories?post=307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tax2efile.com\/blog\/wp-json\/wp\/v2\/tags?post=307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}