For tax day, we thought we'd provide you with some articles likely to get you all riled up.
First, a look at how people who make a lot more money than you use tax breaks to pay a lot less. [Super rich see federal taxes drop dramatically, Yahoo via AP]
Next, some stuff on how corporations blah blah blah not fair share blah blah blah aren't people. [Tax time: Are corporations paying their share? What Went Wrong, gavel wave Tax Prof]
Here's a great article on where all that bailout money went to, such as $220 million in non-recourse loans to Wall St. wives with little or no business experience, and a $35 billion, 0.25% interest rate loan to a bank that is 59% owned by Libya (not the rebels, but the country run by an admitted terrorist). [The Real Housewives of Wall St., Rolling Stone]
And finally, a little bit of tax advice to the 0Ls of the world. Form a law firm before going to school. You won't be getting an office, a shingle, business cards, or even a website. All you need is a bank account and maybe file some "Doing Business As" forms with the state. But, since you won't actually be practicing law, don't worry, you're not running afoul of ethics rules.
Then, take out your student loans in the name of the firm, rather than your own name. No, this won't create any sort of limited liability and get you off the hook for paying, because odds are you will have to personally guarantee the loans. But, what you can do is when you start paying back your loans, pay from the company account, and deduct that from your taxable income, cost of doing business.
If you get hired by a firm, the money will end up going to you, not to your shell company, so you won't be able to use this trick. But, if you end up as a solo practitioner, or can find a firm willing to play along and hire you as an independent contractor, you can end up getting a major tax break.
We're not actually sure if this is a legit strategy, but being charged with tax evasion means you have to know for a fact that what you're doing is illegal. We think there's a reasonable enough argument that this is legit, so at worst you'll just have to pay back what you owe plus a little interest. That's what you would have paid anyways, and if the interest the IRS charges is less than the rate on your loans, you still come out ahead.
Really though, this probably would work. If you were at a firm and that firm paid for you to get an LLM, they would be able to deduct the amount they paid from their taxable income. What's more, your student loans are in fact a business expense, at least in the common understanding of what a business expense is, so no need to feel like you're doing anything unethical. You're simply fixing a hole in the tax code.