Hello!
I was wondering if anyone had any information on specific repayment plans while in Japan. Would we report our Japanese income for the income-based repayment option? I also saw somewhere that we can deduct up to 100k of foreign income a year (our entire salary) when we get around to American taxes next year. But what about when we get there later this month?
If I’m misunderstanding the foreign earned income exclusion, does that mean our japanese income IS taxed by the US in most cases?
What are some strategies that you all used to lower your monthly payment while in Japan?
2 comments
You will be required to pay $0 while living in Japan. But you need to be mindful of compounding interest.
Income based repayment plans are based on reported adjusted gross income (AGI). Your AGI after applying the foreign earned income exclusion while overseas is $0 unless you make more than $120,000.
Regarding taxes, you pay $0 unless you make over the $120,000 threshold.
File your taxes and apply the earned income exclusion. You won’t owe taxes and your student loan payment will be calculated based on an income of $0. But remember to send enough every month to cover interest.
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