I've been out of work and defaulted on my federal student loan. My husband works and we usually file joint taxes

I don't want the tax return to be seized. How do I protect against this until I get in a better position to pay my loan?

Asked by Meredith L

2 Answers

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Answered by Paul Carag, Financial Adviser in Renton, WA
Hi Meredith, ultimately, this should be answered by a CPA with experience in these issues so I would encourage you to reach out to one. However, what I'm seeing in my research is that if you do decide to file jointly (which will probably allow you more deductions than filing separately, i.e. a bigger return), you should also file an 'injured spouse relief' form (Form 8379) along with the return so that the portion of the refund your husband is entitled to will still be returned to him regardless of your debt that they can intercept from your refund. Filing separately from your husband should also protect his refund but again, the return may be lessened due to less opportunities for write-offs filing this way. Also, from everything I'm seeing it would be incredibly hard to get the return after they've already taken it do be sure to get with an experienced CPA to file your return so that proper steps are taken for your husband to get what he is owed. That CPA should work the situation both ways to tell you the best scenario and outcome. Hope this helps. | 08.20.15 @ 23:09
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$commenter.renderDisplayableName() — {comment} | 12.08.16 @ 02:09
Answered by Dave Bradley, Investment Manager (Financial Advisor) in North Charleston, SC
Hi Meredith.

Paul has offered you a great suggestion with the Injured Spouse (form 8379). Check with your CPA and tax advisors on getting this completed. Also are you currently in default? If not, forbearance is a great option. Default is a last resort and requires careful consideration. I highly suggest you consult with your note holders and trusted advisors before doing this.

Feel free to contact us directly for more information. We have lots of no cost educational resources designed to get you where you need to be financially. No obligation.

It's not what you make, It's what you keep that determines your lifestyle. | 04.18.16 @ 17:13
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$commenter.renderDisplayableName() — {comment} | 12.08.16 @ 02:09
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