Amending Tax Returns from Separate to Joint for Student Loans: When and How to Do It

Many student loan borrowers file their taxes as married filing separately to exclude their spouse’s income from the calculation. This can lead to a lower income-driven repayment (IDR) for student loans, but the decision sometimes comes with much higher tax costs, as married filing separately generally costs more than filing jointly.

Did you know there's a way to potentially get a refund for those higher costs? By amending your old tax returns, you could recoup the extra money you paid. This guide will walk you through the steps to determine when and how to amend your tax returns.

What is 1040-X and how to use it to amend an old return

The IRS realizes that mistakes happen, so it has a form called 1040-X that you can use to amend your old returns up to three years in the past. For April 2024, you could amend old tax returns as far back as the 2020 tax year.

To amend an old married filing separate return, you would simply file 1040-X and show “married filing joint” instead of “married filing separate.”

Let’s assume you filed separately in 2020, not knowing that the student loan pause would be extended more than a half dozen times. That would’ve made your married filing separate tax status irrelevant for student loans.

If you took action by April 2024, you could’ve amended that old return to joint and received a refund for any additional tax cost of filing separate vs. joint.

Related: “Married, Filing Separately”: Impact on Student Loan Payments and Your Taxes

How much do you need to save to justify amending a separate return?

You can use our married filing separate calculator to estimate the cost of filing separately in the past.

You would simply review each of your 1040 forms to see what you reported for your adjusted gross income (AGI). Then input those numbers into the calculat,or and you’ll get an estimate of the cost of filing separately for that year.

Before April 2025, you can amend 2021, 2022, or 2023 tax years.

So how much would you have to save through amending to justify doing it?

Any number I give you would be arbitrary, but I’d suggest anything below $2,000 of cost savings isn’t worth amending for.

Based on our experience running a tax business through our advisory firm, SLP Wealth, at least half of borrowers who file separately shouldn’t bother amending.

Why shouldn’t a borrower amend to get a $2,000 refund? There’s no hard and fast rule for this, but I’ll share my reasons.

Reasons to avoid amending your past tax returns

Amending old tax returns might seem like a straightforward way to recoup extra costs, but it's important to weigh the potential drawbacks. Here are a few key reasons why you should think twice before taking this step.

Amending your return might increase audit chances

Theoretically, amending an old return might attract more attention, either manually or through an IRS algorithm. This is purely speculative, but if repeatedly amending old returns could increase the probability of being audited, most taxpayers would probably want to avoid it.

And it should be noted that you have nothing to fear from an IRS audit if you’ve done things properly. But most folks would probably pay money to avoid an increased probability of audit, and there’s no way to know with increased IRS funding what would trigger an increased audit probability.

Amending an old return has a cost to it

While amending most returns is pretty straightforward, most tax preparation firms would probably charge a few hundred dollars for it.

Suppose you’re saving $1,500 from amending your return from separate to joint. If it costs you $500 to amend, yes, you’re saving $1,000, but you must also sign off on it, remember to take action, follow up with the tax preparer, etc.

Even if the savings are low, amending is up to you

Even if the savings are low, amending a return might be justified — some folks would open a bank account for a $500 bonus, so it could still be worth your time, net of any costs. 

I don’t want to oversell the risk of audit if you amend returns. It’s a possibility, but the IRS assures the public that audit rates will only increase for high-income earners. The issue is that you don’t know how much you can trust that statement.

What time should you amend your separate return?

The smartest time to amend your separate return is when (1) it’s no longer being used for student loan purposes and (2) your tax preparer has the time to get to it for you.

That means the middle of tax season is not a good time to ask your preparer to work on this.

Ideally, you’d check with them during the off-season to find out when they’ll be able to pay more attention to your request.

And if you check something like our married filing separate calculator and find very modest cost savings, it’s not worth your time or theirs to look into it.

Just remember the three-year lookback deadline for amending: April 2025 means the 2021, 2022 and 2023 tax years are fair game to amend before that date.

Why wait to amend if it’s legal?

You might ask, why would I wait to amend my tax return? Why shouldn’t I amend it immediately after getting a new IDR payment?

It’s because this strategy represents a gray area. The Department of Education has never said whether it’s allowed or not. To play it safe, you want to show the same income for the entire period you recertified your most recent IDR payment.

For example, if you recertify in June 2025, you want your 2024 tax return to be left alone until July 2026, at which point it would be safe to amend 2024. 

Your 2023 return would still be used for your IDR payment in May 2025, but once your new 2024 return is used to recertify in June 2025, in this example, you could go back and amend 2023.

How much can you save by amending old tax returns?

Some borrowers can save enormous amounts of money by amending old returns. 

A few of our tax clients had married filing separate costs of $10,000 to $20,000. 

In this case, amending a separate return to joint on time would return the entire cost to the client.

So, paying attention to amending old tax returns from separate to joint can yield a very high hourly rate for the time you spend on it. This is particularly true for borrowers with large differences in their annual incomes, which is when filing separate tends to carry the most cost.

Who is the most attractive candidate for amending old returns?

If you have an income difference of more than $200,000 and you live in a common law state (as opposed to a community property state), you’re an excellent candidate to amend your old returns as the cost of filing separately is likely very high compared to filing jointly.

Other scenarios, such as adoption and Medicare enrollment, can trigger large filing separate costs outside of this income difference example, so the cost of filing separately depends on your unique tax situation.

Get expert tax help in amending old returns

If you’re interested in help with amending old tax returns, you can reach out to your tax preparer.

If you want us to help you with it, we only offer that service to clients of SLP Wealth, our SEC-Registered Investment Advisor.

To join, simply fill out this form to become a financial planning client. Then, you could add on tax services for an additional cost.

With the potential benefit of amending old returns, possibly as high as thousands of dollars, this one service alone could pay for full-service financial and tax planning.