Two questions: 1) should I file my taxes separately or jointly with my spouse? 2) what should I sink my extra student loan money into?
Please refrain from telling me how foolish I was for taking out so many loans. I was an ill-informed and ill advised student and I know how ridiculous this amount of debt is. But, as you'll see, I think I'm going to turn out ok.
Background:
-Spouse and I both are finishing our advanced degrees this year
-I'll be starting at 80,000 and will be earning 100,000 well within 10 years
-My spouse will likely start at 60,000 and earn 70,000-80,000 within 10 years
-My debt: 350,000. Spouse debt: 35,000
-We both qualify for income based repayment (15% of discretionary income for student loan payment), and public service loan forgiveness (remainder of balance is forgiven after 10 years and we don't pay interest on that amount).
Our student loan amounts will be (using 90,000 for me and 70,000 for spouse)
Option 1) filing jointly
MFJ-1700/month (20,400/year), 1250/month (15,000/yr)if we both max out 401ks and HSA
Amount paid over 10 years: 150,000- 204,000
Amount forgiven after 10 years:
181,000-235,000
Option 2)
MFS-me-830/month (9,960/year), 530/month (6,360/year) if I max out 401k and HSA
MFS-spouse-650/month (7,800/yr), 355/month (4,260/year) if maxing 401k
Amount paid over 10 years: 106,200-177,600
Amount forgiven after 10 years: 207,400-278,800
Knowing that my career niche allows me to take advantage of student loan forgiveness, I took out the maximum amount of loans offered to me. I have about 60,000 in the bank that was refunded back to me. Per my lender, I can use it how I see fit, including investing. I was very transparent when asking, as I don't want to break the law.
So how should I file my taxes? I know there are some serious drawbacks to filing separately.
And how should I spend by 60,000? I already have an emergency fund, cars, etc. No house or mortgage yet.