As the average student loan balance continues to rise, borrowers face larger monthly payments as they begin careers after graduation

As the average student loan balance continues to rise, borrowers face larger monthly payments as they begin careers after graduation

Given the significant increase in student loans, tax advisers should have a basic understanding of the student loan repayment options available and the impact of tax filing status on loan payment amounts. For a young couple with debt levels used in our examples (starting at $30,000 in total debt), the loan payment savings under an income – driven repayment plan can exceed the MFS tax cost for combined salaries of up to approximately $100,000. Tax planning that reduces the AGI of the individual with the higher debt level increases the overall savings when the individual is using an income – driven repayment plan.

While identifying options to reduce AGI is a good idea for most taxpayers, it provides a double benefit to those with income – driven student loan repayment plans

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In search of smaller monthly payments, many borrowers turn to income – driven repayment plans. Tax advisers online Mckee payday loans can serve an important role in educating taxpayers about the impact of their tax filing status on their loan repayment calculation. By identifying tax planning strategies, tax advisers can help clients develop plans for paying off their student loans, taking into account their tax liability.

1 Congressional Budget Office,Income-Driven Repayment Plans for Student Loans: Budgetary Costs and Policy Options (), available at . For more on student loan debt, see Kelley and Eiler, “Student Loan Debt: Tax and Other Considerations,” 51 The Tax Adviser 800 (). Læs videre “As the average student loan balance continues to rise, borrowers face larger monthly payments as they begin careers after graduation”