WASHINGTON — Newly minted doctors and other health care workers may lose a critical tax deduction under the tax code overhaul House Republican leaders unveiled Thursday.
The proposal repeals the student loan interest deduction — a policy that helped more than 12 million Americans who racked up education loans save up to $2,500 on their tax bills in 2015. The popular policy doesn’t require taxpayers to itemize their deductions to claim it — instead, it’s available to anyone paying interest on either private or public student loans who makes less than $80,000 in a year.
Many of those student loan holders are recent medical school graduates, who make a median $54,600 in their first year of residency, according to the Association of American Medical Colleges.
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As a current medical student, I’d be interested in learning more about what this tax reform would mean for me right now.
After residency, new docs make just enough that they do not qualify for the student loan interest deduction because of the alternative minimum tax (AMT). The one good thing I saw in Trump’s tax reform was that it would remove the AMT and then I would be able to deduct a fraction of my student loan interest. Now, that deduction is the on the chopping block so one of the biggest advantages of repealing the AMT will be gone.
And people wonder why there’s a doctor shortage, and the rates of suicide and depression are so much higher for medical students and doctors than they are in the general population.
No attending physician has gotten a penny of student loan tax deduction. We’re all too ‘rich’ as it is phased out in mid $100Ks incomes.
Never mind the $300,000 in debt and little to no savings at age 30.