Could Filing Your Taxes Separately Save You On Student Loans?

Blogger Physician Zen came out with a very comprehensive post that said there are about 70 physician blogs at this time of writing.

However, I’m not aware of a physician blog that focuses on the financial issues of a family with one physician still in training and one working non-physician spouse. And speaks this audience. So I’m filling in the gap for an article that addresses this.

I hope this post will be helpful to you and your family!

You’re working outside the home to financially support your DrSpouse through training.

Then comes tax time. And you ask yourself:

“Should you file taxes jointly? Or should you file separately?” 🤷‍♀️

For dual-income couples where one earner is a doctor and the other is a non-doctor, student loan management goes from “Level 1 Easy” to “Level 10 Super Confusing.” It depends on many factors.

I have had to navigate through the student loan landscape for our family. I am passionate about personal finances, have a gift for making it easy to understand, and want to share what I know.

Let’s take a look together.

Getting Help For Your Situation

If you crowdsource for advice on Facebook in a non-medical group or among non-medical friends whether you should file separately or jointly, people will have NO idea why this is even a question. And they will unanimously say:

“Why would you ever file taxes separately??”

After all, it’s well-known that the U.S. tax system rewards you for being married and your tax bill will be lower for filing jointly.

But there’s a loophole in the law that affects many medical families.

The Loophole Changes Everything

What most people don’t know is this:

Our government offers income-driven repayment plans that allow you to file taxes separately so that YOUR income (as the non-doctor spouse) isn’t taken into account when calculating the minimum monthly payment for your student loans.

And that’s why we’re all scratching our heads.

So is filing separately right for you?

It depends on how much YOU (as the non-doctor spouse) make, you could come out ahead despite having a higher tax bill for filing separately by having lower student loan payments.


It depends. Each family’s numbers are different. You have to look at your numbers.

I’ll give you resources and step-by-step instructions for clarity. There will be lots of numbers here and might make it boring. But don’t scroll down fast! Bear with me as we figure this out together and save a ton of money.

Let’s Ask The First Questions

Before you proceed and even contemplate about taxes, you have to answer these two questions:

  1. Are you on the right payment plan?
  2. Are you going for PSLF?
  3. How much are you paying in taxes?

Then you can decide whether to file your taxes jointly or separately.

Part 1: Are You On The Right Payment Plan?

There are three good payment plans to choose from:

  1. Income-Based Repayment (IBR)
  2. Pay As You Earn (PAYE)
  3. Revised Pay As You Earn (REPAYE)

(If you are on ICR, you should get off of it right away and switch to one of the above. Never heard of it? You’re not missing anything.)

Most medical families rely on a loan servicer customer rep to tell you what plan to be on. Sadly, you don’t consistently get a knowledgeable rep on the phone. You may luck out and get a competent one. Or you may be unlucky.

Don’t automatically assume these reps did a perfect job.

“Trust, but verify.” -Ronald Reagan

Figuring out the best payment plan boils down to these rules of thumb:

  • Assume the right plan for you is REPAYE unless proven otherwise. The vast majority should be on this plan.
  • But if YOU (as the non-doctor spouse) earn a high income, consider PAYE. And if your DrSpouse started undergrad before October 2007, consider IBR.

In a nutshell, you should probably be on REPAYE. A few who make a lot of money should be on PAYE. And those whose DrSpouses are non-traditional and went to medical school later should be on IBR.

Then, use the student loan repayment estimator provided by the office of Federal Student Aid to find out how much your payments will be.

Part 2: Are You Going For PSLF?

If you’re going for PSLF or even considering the remote possibility of it, choose the payment plan (e.g. REPAYE, PAYE, or IBR) with the lowest payments.

If you’re 1000000% sure you’re not going for PSLF, refinance with a private lender. Just know that doing this is irreversible and permanent. You can NEVER make your loans go from private lender back to federal.

For most medical families, your most winning strategy to keep PSLF on the table and not refinance.

Now let’s answer the third part.

Part 3: How Much Are You Paying In Taxes?

Now that you know that you’re in the right payment plan, let’s figure out the tax portion.


REPAYE does not offer any advantages at all to file separately because it factors both spouses’ incomes to calculate the minimum payment.

So if you’re on REPAYE ➡️ ALWAYS file taxes jointly. It’s cut and dry.


If on IBR or PAYE:

For those who are on IBR or PAYE, now you have to figure out what your tax liability is for filing jointly versus separately.

A tax software like H&R Block or TurboTax will let you hypothetically file your taxes both ways. Use this software and compare the two tax filing outcomes to your current payment plan and add up the costs.

If your costs are lower, then file separately. If they are higher, proceed to file jointly like every “normal” married couple.

In Case You Are Going For 20- or 25-Year Forgiveness

I have to mention that there is a program that some of you are on called the 20- or the 25-year forgiveness. The 20- or 25-year forgiveness program is NOT the same as PSLF, it’s a completely different animal!

If you have never heard of the 20- or 25-year forgiveness plan, ignore this section and scroll on.

But if you are in this program, which is not common, there are tax implications for making low monthly payments for the long-term. Your strategy may be different than the ones described in this post. You need to close this window and talk to a tax professional.

Don’t Want To DIY Or Need Extra Help?

Sadly, your student loan servicer won’t be able to help you with this. But there are resources.

Hire Travis Hornsby of The Student Loan Planner for a one-time flat fee consult. It’ll run you a couple hundred but it’s affordable and can potentially save you tens of thousands of dollars in mistakes. We used his services and have no problems recommending him to you.

Once the job is done, it’s done. And you move on with your life knowing it’s done right.

In Summary

As a dual-income couple, filing separately could save you a ton on student loan payments. But each couple’s situation is very different.

The answer to whether you should file taxes jointly or separately really depends on each family’s numbers.

You won’t find clarity from non-medical friends. You have to do the calculations yourself. Or you could hire a student loan consultant to do it for you.

I’m a hugger. And I’m hugging and supporting you, friend ❤️

To your strong medical family,