The Theft Protection

Myths and Facts About Identity Theft


If you’re a resident physician
or you’re in a fellowship program,
you can save money in the public service
loan forgiveness program
by knowing some little-known
rules with the tax code
to lower your adjusted gross income.
Why is that important?
Because if you lower your
adjusted gross income,
you’ll have a lower student loan payment.
Because since the
government takes your AGI,
that stands for adjusted
gross income for short,
if they look at that and
they take 10% of that
to determine your student loan payment,
if that number is lower
then you’ll be able to
save 10% of whatever
the amount that you lowered it by.
The first common way to lower your income
for the PSLF program
as a resident or fellow
is saving for retirement.
A lot of financial planners or advisors
might tell you to take the Roth option
for your retirement savings
while you’re in training
because of the lower tax
rate that you’ll be in.
While that might make sense for folks
who have no student loans,
if you do have student debt,
it’s a little bit more difficult
of a decision to do the Roth.
I recommend personally that
you go with the pre-tax
401(k), 403(b), or if
you don’t have access
to a retirement plan, traditional IRA.
You can save as much as $18,500
if it’s an employer retirement plan
and you can deduct that off
of your adjusted gross income
which will allow you to have
a lower student loan payment
if you do the $18,500 max
of about $1,850 less a year.
That’s big savings
because the PSLF program
forgives your debt tax-free,
so anything less that you pay
ends up being forgiven,
which is basically the same thing
as money in your pocket.
Number two is health savings accounts.
Using your health savings account,
you can put as much as $3,450 away
for your expenses for healthcare tax-free,
and then you can have it grow tax-free
and pay health expenses tax-free.
It’s a triple tax exempt account.
If you’re married or you have a family,
then you could put $6,900
into a health savings account,
which is even more money
that you can deduct from your AGI
and have a lower student loan payment.
A lot of residents and
fellows are not eligible
for health savings accounts,
but if you are, you just need to see
if you can sign up for
the high deductible plan
that your work offers
and then if you can sign up
with a health savings account
administrator that manages the
high deductible health plan.
You’ll get a debit card,
you can pay your health
expenses whenever you need to
with your debit card.
It’s really a pretty easy thing to do.
So, that’s one of the most popular ways
to reduce your AGI and your income,
which will also help you with
your student loan payments.
The third way is something
that you should never overlook,
and if you’re doing your own taxes,
hopefully you’re doing something
like TurboTax that can
catch an error like this.
But if you have modified
adjusted gross income
of less than $65,000,
you can claim a $2,500 student
loan interest deduction.
This could save you a lot of money,
especially if you’re in a state
with a high state income tax rate
and it will lower your
adjusted gross income
and save you money in
your student loans too.
So, the student loan interest deduction
is a tremendous thing to take
as a resident or a fellow,
because most people
when they’re in training
are gonna have less than
$65,000 taxable AGI income.
So, the number four way to
reduce your student loan payments
as a resident or a fellow
is to take advantage of
capital losses up to $3,000,
if you have them.
A lot of people are not aware
that if you have a capital loss
you can deduct up to $3,000
off of your ordinary income
when you have that kind of a loss.
Hopefully you don’t have this.
Hopefully you don’t have
to deal with that problem.
But let’s say you bought
BitCoin at $20,000
and now it’s down at $6,000 something
and you have a big loss,
you could write a lot of that off
and save money on taxes,
which would reduce your
student loan payments
because the government will
see less taxable income.
So, those are four ways
that residents and fellows
can reduce their taxable
income and save money
on their student loans
if they’re going for the public service
loan forgiveness program.
If you happen to be married
to a very high income earner,
have no desire or ability
to go for the PSLF program,
then you might look at
refinancing as a resident.
You can look at my site,
there’s a lot of links that
are cash back bonus links
to Splash and Laurel Road, among others
that will refinance your
loans as a resident.
But I typically suggest
you keep your options open,
’cause you never know what
will happen as an attending
in terms of qualifying
for the PSLF program.
Hope you get out there and
reduce your taxable income
and save some money on your student loans,
because heck knows you have
better places to spend it on
when you’re working 80
hours a week at a hospital.
Thanks for watching.

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