joanmcq Posted April 3, 2016 Report Share Posted April 3, 2016 I first heard of the MFS student loan thing when one of my newly married couples came back to me to change to MFS because of the student loan marriage penalty. One spouse is just out of school, so not so great salary yet. The other makes a decent, but not outrageous salary. They pay a little bit more in tax MFS (and under community property the salaries are split in half, not like the example above. But the loan payments are much lower, and as a young couple starting out and trying to buy a house - and house prices here are going through the roof again...for a few years the loan payment makes life a little bit easier. But it I'm doing more MFS this year than in my whole time as a tax pro. 2 Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 3, 2016 Author Report Share Posted April 3, 2016 9 hours ago, Richcpaman said: It's a whole new ball game out there. Young couple in my office Both are Lawyers. New ones. Both get paid $60k each. No Kids yet, but one in the oven. Combined Student loan debt? $400k. They file separate to keep the payments affordable. They are NEVER going to pay off the student debt. At $300 a month each, it will never happen. Difference between Joint and MFS? $282 between fed and state. The payments on the student debt would have tripled. I have two couples like this. And more to come. Why get married? Rich Wow, I have put three kids thru post secondary school (one in graduate school now) on less than these two make. We have no debt to repay. Yeah, we eat beans and rice, rice and beans, and drive twelve year old vehicles. I can't get my head around $400,000 in student loan debt. There is something wrong when you think it's a good investment to pay $400K (plus the interest will probably be another $400K if you don't get moving on it) for a degree. If I were guessing, I'd say the loans went toward excessive living it up fees. You're right, they better step up the payments as soon as possible. And they owe the money, they need to pay back the money. I don't understand the apparent confusion with so many these days, thinking loan debt is some burden put on them by society. No, you did that to yourself. Pay what you owe. In the long run, reducing the payments just prolongs and intensifies the agony. People don't understand it, do they? 11 Quote Link to comment Share on other sites More sharing options...
Randall Posted April 3, 2016 Report Share Posted April 3, 2016 24 minutes ago, RitaB said: Wow, I have put three kids thru post secondary school (one in graduate school now) on less than these two make. We have no debt to repay. Yeah, we eat beans and rice, rice and beans, and drive twelve year old vehicles. I can't get my head around $400,000 in student loan debt. There is something wrong when you think it's a good investment to pay $400K (plus the interest will probably be another $400K if you don't get moving on it) for a degree. If I were guessing, I'd say the loans went toward excessive living it up fees. You're right, they better step up the payments as soon as possible. And they owe the money, they need to pay back the money. I don't understand the apparent confusion with so many these days, thinking loan debt is some burden put on them by society. No, you did that to yourself. Pay what you owe. In the long run, reducing the payments just prolongs and intensifies the agony. People don't understand it, do they? I agree Rita. Doesn't make sense to me. I have a couple of local university profs who recently came in with their new Phd and a mountain of student loan debt. Whew. 3 Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted April 3, 2016 Report Share Posted April 3, 2016 I am so glad that my son made it through with very little debt. He busted his rear and got a great scholarship and worked a lot the entire 4 years. He did take out a small loan the first year, because we told him that if he didn't live at home, it was on him. He hated his roommates, so he pretty much lived here anyway. He is amazed at how much student loan debt most of his friends have. Some of them even took out loans to travel-not to study abroad, just party. 2 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted April 3, 2016 Report Share Posted April 3, 2016 I have a classmate from my undergraduate days who not only made it through undergrad with no loans, but also med school. Even in those far off days, that was a feat. But she's been sitting pretty ever since. 6 Quote Link to comment Share on other sites More sharing options...
mcb39 Posted April 4, 2016 Report Share Posted April 4, 2016 On 4/2/2016 at 11:27 AM, Catherine said: I tried that exactly once. It was a lawyer -- who bills as much per HOUR as my entire fee was -- and he paid half. I did not invite him back the next year and frankly if he offered $1,000 per return going forward I wouldn't take him back. The level of disrespect shown to another professional was astounding. And this reminds me of the attorneys who give out tax advice and have no idea what they are talking about. (Not all attorneys). Just had a client tell me that her daughter stole her husband's credit card many years ago and ran up a huge amount of debt. Daughter refused to pay so dad has been paying $500 a month for years. (Daughter had filed bankruptcy). They just paid off the debt in Dec. Their attorney told them that they should be able to take this on their tax return as a "hardship deduction". AGI of this couple is $163 K. Can anyone lead me in a different direction with a cite that would allow this deduction; which I have denied. 3 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted April 4, 2016 Report Share Posted April 4, 2016 1 hour ago, mcb39 said: And this reminds me of the attorneys who give out tax advice and have no idea what they are talking about. (Not all attorneys). Just had a client tell me that her daughter stole her husband's credit card many years ago and ran up a huge amount of debt. Daughter refused to pay so dad has been paying $500 a month for years. (Daughter had filed bankruptcy). They just paid off the debt in Dec. Their attorney told them that they should be able to take this on their tax return as a "hardship deduction". AGI of this couple is $163 K. Can anyone lead me in a different direction with a cite that would allow this deduction; which I have denied. 4 Quote Link to comment Share on other sites More sharing options...
mcb39 Posted April 4, 2016 Report Share Posted April 4, 2016 I guess that means NO! I was trying to read the Bad Debt rules, but still told them NO! They said "Forget it, we don't want to trigger an audit"! 1 Quote Link to comment Share on other sites More sharing options...
RitaB Posted April 4, 2016 Author Report Share Posted April 4, 2016 6 minutes ago, mcb39 said: I guess that means NO! I was trying to read the Bad Debt rules, but still told them NO! They said "Forget it, we don't want to trigger an audit"! Trying to prove a negative (no, you can't do that, they don't know what they're talking about) is my second biggest time hog and most frustrating one. The chatting with clients I actually enjoy. 2 Quote Link to comment Share on other sites More sharing options...
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