Taxes in Medical School

[DoctaJay]

I'm about to get married in July, and my fiancee and I will both be starting medical school. We are both claimed as dependents by our parents now and we have never really had real jobs (except for summer research) and therefore have never really filed taxes. Since we both will be living completely off of loans in medical school, do we still have to pay taxes? What kind of taxes? I'm planning my budget and I wanted to know how much of our loans we should save to pay taxes.

Also, I'm doing my budget, and I'm trying to figure out how much to allocate health insurance and life insurance. Should I just rely on the health insurance through the school (we are both quite healthy and 21 years old)?

Can we wait until residency to start paying life insurance?

---

Members don't see this ad.

 

[mshheaddoc]

You won't have any taxes to file unless you make money and have taxes withheld. Then you are technicaly entitled to file to most likely receive back any monies you paid if you made less than the standard deduction. If you have a self-employed side business or one of you was working I'd say file. But I'm not filing this year (first time since I'm 17) as my husband and I were strictly students this year with no income to claim. Technically you could file with $0 income (just a formality) but its not worth it.

Health insurance - I'd suggest to just go along with your school's as it would probably be the easiest. You could just get a major medical which might be cheaper but it won't cover stuff the little stuff like if you got strep and needed to see a doctor. Getting healthcare on your own is a pain if your school doesn't offer it.

Life insurance - most only recommend life insurance if you are working. I'd probably agree with them. Now if you are going to have joint assets (such as a house) I might suggest looking into a small policy until you start residency. Just enough where the other would have some breathing room until they could sort out the assets. Its morbid to think like that, but its hard reality. But overall I don't think you'd need to worry about anything like that until you are both through school and making money. Life Insurance isn't cheap!

Oh and I hope you guys don't combine your loans (I don't think you can do it anymore but if you still can ... DON'T!). Just a word of warning

Hope this helps a little I'm sure someone else will come through with their input.

 

[DoctaJay]

You won't have any taxes to file unless you make money and have taxes withheld. Then you are technicaly entitled to file to most likely receive back any monies you paid if you made less than the standard deduction. If you have a self-employed side business or one of you was working I'd say file. But I'm not filing this year (first time since I'm 17) as my husband and I were strictly students this year with no income to claim. Technically you could file with $0 income (just a formality) but its not worth it.

Health insurance - I'd suggest to just go along with your school's as it would probably be the easiest. You could just get a major medical which might be cheaper but it won't cover stuff the little stuff like if you got strep and needed to see a doctor. Getting healthcare on your own is a pain if your school doesn't offer it.

Life insurance - most only recommend life insurance if you are working. I'd probably agree with them. Now if you are going to have joint assets (such as a house) I might suggest looking into a small policy until you start residency. Just enough where the other would have some breathing room until they could sort out the assets. Its morbid to think like that, but its hard reality. But overall I don't think you'd need to worry about anything like that until you are both through school and making money. Life Insurance isn't cheap!

Oh and I hope you guys don't combine your loans (I don't think you can do it anymore but if you still can ... DON'T!). Just a word of warning

Hope this helps a little I'm sure someone else will come through with their input.

Thank you so much for the advice! The only thing I'm confused about what you said is the combining of the loans. What my fiancee and I are going to do is this; since I have a full scholarship, then I will borrow enough to cover our living expenses (basically everything except for tuition and fees). This will be up to about $38,500, we don't need all that but we just want extra just in case. It will all be federal stafford loans. She will only borrow enough to cover her tuition and fees, and we will both just trying to live off of the $38,500 that I am borrowing. Is this smart? I totaled it out, and after 4 years, together, we would have only have incurred about $248,000 worth of loans, compared to close to $500K if we were both borrowing the max.

 

[mshheaddoc]

That is a pretty smart move in my opinion. My husband and I do something similar. I only take out tuition (for the most part) and he covers living expenses. I think its a great strategy to minimize your student loan interest.

 

[IceMan0824]

Thank you so much for the advice! The only thing I'm confused about what you said is the combining of the loans. What my fiancee and I are going to do is this; since I have a full scholarship, then I will borrow enough to cover our living expenses (basically everything except for tuition and fees). This will be up to about $38,500, we don't need all that but we just want extra just in case. It will all be federal stafford loans. She will only borrow enough to cover her tuition and fees, and we will both just trying to live off of the $38,500 that I am borrowing. Is this smart? I totaled it out, and after 4 years, together, we would have only have incurred about $248,000 worth of loans, compared to close to $500K if we were both borrowing the max.

Don't forgot that you both could technically moonlight during this summer, and the first summer of medical school. You can even accomplish this while doing research, or whatever other extracurricular activity you both want to engage in. This way, you can have some extra disposable income and you can reduce that $38,000 you need to borrow.

If you do plan to moonlight during the summer before, make sure to receive your financial aid package first (which it sounds like you have done already), so as not to risk increasing your efc.