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- Jan 23, 2011
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- Medical Student
Im not understanding something about IBR.
Apparently, some ppl think it's a good deal during your intern
year and second year. Why? Because of the way they determine your
payments.
How do they determine your payments as an intern?
Either tax return from 4th year of med school (most ppl didn't
have income) OR a recent intern year pay stub.
So I've been paying $400 a month because
I used my current pay stub instead of med school tax return which I didn't file?
This makes no sense. Anyone please?!
For reference, this is what I'm referring to:
Your monthly payment under IBR is calculated from the previous year's tax return. So for your intern year, IBR monthly payments are calculated from the tax return reflecting the second half of third year and the first half of fourth year. If you barely made any money (a bit from tutoring, part-time work, work study, etc won't matter), then your calculated IBR payment with be $0. Since there is no "minimum" payment for IBR, this $0 per month is a valid payment and contributes to the 120 required for PSLF.
Why the second year of IBR is still pretty good
The tax year used for your second year of IBR payments is the one made up of half of fourth year and the first half of intern year. During this tax year, you actually only made half of your intern salary (~$25k, not the full $50k). Therefore, the calculated IBR payments will be in the neighborhood of $200 per month instead of $400. Not bad.
caveat??: this assumes most ppl apply for IBR as soon as they start residency in july and I waited until oct/nov, the application didn't get processed until January of following year...
Apparently, some ppl think it's a good deal during your intern
year and second year. Why? Because of the way they determine your
payments.
How do they determine your payments as an intern?
Either tax return from 4th year of med school (most ppl didn't
have income) OR a recent intern year pay stub.
So I've been paying $400 a month because
I used my current pay stub instead of med school tax return which I didn't file?
This makes no sense. Anyone please?!
For reference, this is what I'm referring to:
Your monthly payment under IBR is calculated from the previous year's tax return. So for your intern year, IBR monthly payments are calculated from the tax return reflecting the second half of third year and the first half of fourth year. If you barely made any money (a bit from tutoring, part-time work, work study, etc won't matter), then your calculated IBR payment with be $0. Since there is no "minimum" payment for IBR, this $0 per month is a valid payment and contributes to the 120 required for PSLF.
Why the second year of IBR is still pretty good
The tax year used for your second year of IBR payments is the one made up of half of fourth year and the first half of intern year. During this tax year, you actually only made half of your intern salary (~$25k, not the full $50k). Therefore, the calculated IBR payments will be in the neighborhood of $200 per month instead of $400. Not bad.
caveat??: this assumes most ppl apply for IBR as soon as they start residency in july and I waited until oct/nov, the application didn't get processed until January of following year...
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