Tax season is in full season, and it is timely to go over a few pointers to help everyone out.
For most medical students and residents, student loans remain in deferment or forbearance. This means that you aren’t obligated to make any monthly repayments. It also means that interest accrues and compounds during that time. It also means that your mid-6 figure loan debt continues to grow.
Ideally, you should try to make monthly payments whether it is on a 15 or 30 year repayment plan, to keep the magic of compounding from working against you. Financially, you ought to repay at least $2,500 annually in student loan interest for a tax deduction at the end of the year. It only works before you attain attending status, because there is an income limit that you will exceed after training. For 2012 and 2013, phaseout for student loan deduction begins at $60k for a single filer and $125k for a joint filing. In 2014, it starts at $65k and $130k, respectively. If your annual adjusted gross income (AGI) exceeds the limit, then there will be no deduction for payment of loan interest.