Married Filing Separately vs Jointly: Strategies for Student Loan Repayment

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  • Married Filing Separately vs Jointly: Strategies for Student Loan Repayment
Author: Joseph Reinke, CFA

Student loan borrowers who are married and using and an income driven repayment plan (IBR, PAYE, SAVE) have a massive decision to make.  The monthly payment on all these plans will be different when you are married and based on how you file your tax return.  The big question to answer is do you file taxes married filing separately or jointly?

We’ve helped 10,000s married couples make decision over the past 7 years.  In this article I will detail how filing separately vs jointly affects your student loan payment and taxes as well as how you can take advantage of the loopholes to maximize your savings. 

Check out the video version of this article below

The Effect Of Filing Separately vs Jointly

How you file your taxes will affect both your student loan payment and how much you pay in taxes.

Student Loan Effect

Confusion lies on what happens when you file jointly.  The monthly payments are calculated slightly different depending on the plan you’re on, i.e. PAYE, SAVE, or IBR.  However, they are calculated similarly which I will summarize below.

Determining Your Monthly Payment When Filing Jointly

Your payment is based on you and your spouses’ TOTAL income and Federal student loans. However, your monthly payment IS NOT COMBINED. Let’s use an example to illustrate this.

The situation:

Your Federal Student Loans: $140,000

Your Spouse’s Federal Student Loans: $160,000

Combined Federal Student Loans: $300,000

Your Combined AGI (Combined Income): $150,000

The total monthly payment will add up to $1,098 per month. Most people think that each spouse will have to pay $1,098 per month. THAT IS NOT THE CASE!  You and your spouse will each pay a portion of that payment, divided as follows:

Your federal student loans are approximately 47% of the total (140k/300k). Therefore, you would have a monthly payment of $512.40 (47% of $1,098) and your spouse’s monthly payment would be $585.60. (53% of $1,098)

If you hear stories that someone had their payments double, triple, etc. when they started filing jointly, this is not accurate. With FitBUX Members, we typically see one of three things actually triggered that change:

  • Their student loan servicer made a mistake;
  • They had something else happen that increased their payment such as salary increase; and/or
  • They are utterly confused and are not familiar with the intricacies of loan forgiveness. 

Determining Your Monthly Payment When Filing Separately

If you are on PAYE, SAVE or IBR and file separately, then your monthly payment is based on your own income and your Federal student loan debt.  That is simple.

Tax Effect

Most of the time when you file taxes married filing jointly, you will pay less income taxes.

Filing separately will increase your overall tax burden most of the time.  However, President Trump’s tax law changes significantly reduced the difference between filing jointly and separately.  These changes are set to expire in 2025 meaning they will go back to the old way if they are not renewed by Congress. 

Retirement Effect

When you are married and file taxes separately, you no longer qualify to contribute to a Roth IRA.  However, you can still do so by doing a backdoor Roth IRA.  In short, a backdoor Roth IRA would entail making a post-tax contribution to a Traditional IRA, then doing a Roth Conversion to a Roth IRA.

The Dilemma Most Couples Face

If couples file taxes jointly, they will save on taxes but have a higher student loan payment.

If they file taxes separately, they will have a lower student loan payment but pay more in taxes.

So what do you do?

I’m going to walk you through what most people do.  Then I’m going to explain an advanced loophole as well.

What Most Couples Do

This is the process most couples do when deciding how to file their taxes.

Step 1:  Ask their accountant how much more they would owe in taxes if they filed separately vs jointly. This can also be done using accounting software such as Turbo Tax.

Step 2:  Then they use an IDR calculator to calculate the impact between filing separately and jointly on their estimated student loan payments.

Step 3: Lastly, they compare results from Step 1 and 2 and go with the option that they believe puts more money their pocket.

For example:

Step 1: You save $4,000 in taxes by filing jointly.

Step 2: However, filing jointly increases your student loan payments by $3,000 per year relative to filing separately.

Step 3: Filing jointly would save $1,000 annually.  Therefore, most people end up filing jointly.  

A Loophole

For those of you that want a more advanced strategy, you can take advantage of an IRS loophole. 

In the current year, you file your taxes separately which reduces your monthly student loan payment.  The government allows us to refile are tax returns for the past three years.  Therefore, down the road you can reclassify the return back to joint and receive a refund.

For example, let’s say you file a separate tax return in 2023.  This means your monthly student loan payment would be lower.  Then we fast forward and the year is 2025.  You can continue to file your 2025 tax return as separate but reclassify your 2023 tax return to joint and receive a refund for 2023. 

We typically see this work very well for couples you have drastically different incomes. For example, one spouse might make $120,000 and the other $70,000. 

General Advice For Married Couples

Always look at your finances as if you are one person and build a joint financial plan.  This doesn’t automatically mean filing separately for tax purposes though.  

It means make the decision together.  For example, we’ve seen a number of FitBUX Members who have a similar income and Federal student loan debt balances as their spouse file separately because they manage their finances separately.  This makes no since to do because it will have little to no effect on their student loan payment but cost them a lot on taxes.

Also, I highly recommend working with a FitBUX finance expert or similar professional and building a complete financial plan instead of just looking at student loans.

For example, when you file separately, you may be giving up certain health care tax credits.

Also, you can no longer directly invest in a Roth IRA.  You have to a back door Roth IRA.

Having a plan that allows you to focus will tremendously improve your mental health and reduce money related anxiety.

Three Common Scenarios

Below are three common scenarios we see with FitBUX members.  However, the recommendations are generalities.  We recommend getting customized help because every situation has its nuances that must be taken into account when building a financial plan.

High Income and High Debt For Spouse #1

FitBUX Member Mary makes $105,000 per year and has $200,000 in student loan debt.  Her spouse David makes $30,000 per year and has no student loan debt.  In the majority of cases, it would make since to file jointly because the tax savings filing jointly should far out weigh the lower monthly payment Mary would receive on student loans if they filed separately. 

They could use the aforementioned filing loophole. However, the amount of refund they get back would be minimal and not worth the accounting fees or headache in doing it. 

High Income (or similar income) and Low Debt For Spouse #1

Mike has an income of $120,000 and no student loan debt.  His spouse Mariah earns $75,000 a year and has $200,000 in student loan debt.  

In this case, it generally makes since to file separately.  Typically in this case, doing so will save this household almost $1,000 a month in monthly student loan payments.

Also, if Mike’s income was similar to Mariah’s, i.e. if it was $75,000 a year, then it would still make since to file separately.

Similar Income and Similar Debt For Both 

Brett and Sherri make $80,000 per year and each have approximately $150,000 in student loan debt.  In general, it would make since for them to file jointly because their student loan payments wouldn’t drastically be different if they filed separately.


It’s crucial for couples to assess their individual financial situations, including income disparities, total loan debt, and long-term financial goals. Understanding the broader tax implications of different repayment strategies, and how they align with your overall financial health, is essential. Additionally, tools like repayment calculators and personalized advice from financial experts can provide valuable guidance in making these complex decisions.

Remember, the journey to managing student loans efficiently is a shared one for married couples. Open communication, regular financial check-ins, and a willingness to adapt your strategy as your circumstances change are key to successfully navigating this path. With the right approach and resources, couples can not only tackle their student loan debt effectively but also lay a strong foundation for their financial future together.

FitBUX has helped thousands of young couples navigate their finances and reduce their stress related to money.  Therefore, they are able to focus on important things like treating patients, work, family, etc.  If you’d like to use our one-of-a-kind technology and have access to financial experts, be sure to sign up at

We look forward to seeing you soon.

Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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