FAFSA qualifications

[AZ-Tax]

Do you have any clients putting pressure on you to get their taxes done or close so then can file an app with FAFSA?

Does FAFSA use AGI or what to determine eligibility?

[Lion]

Fafsa

FAFSA asks for many items from the tax return and for assets as well, for both the student and the parents. They can estimate. They can check the box that they have not yet filed and estimate the tax return items using last year's or what they &/or you know so far or the numbers on your ceiling.

[taxea]

Yes and it just gauls me that FAFSA and other scholarship/grant organizations have such an unacceptable application date. I don't understand how they can expect their clients to provide a current year tax return copy on 2/15 or 3/15 when 1099's and k-1's are rarely received by those dates.

I tell the TP that I have no control on when they receive the documents necessary to complete their returns. If they have a K-1 that isn't required to be issued until 3/15 I will not file a return that I know not to be accurate.

For you Lion...I don't know about the "mainland" but here in Hawaii the scholarship/grant organizations say you can estimate however, they require the finished return to be provided with the application.

I also let the client know that if they have the return done elsewhere without all of the docs, they will have to pay an additional amended fee when the docs are received. Filing the return without all the docs would make me more money but....homey don't play that way.

[Lion]

Fafsa

I haven't seen a FAFSA application ask for actual documents or tax returns; in fact, most of the students/parents lately file the FAFSA and renewals on line. I have had financial aid departments at specific schools ask for the returns. Again, a client can have a draft/unfiled return so marked to work from and not actually file a return until it is complete. I have also seen both FAFSA and specific college financial aid "audits" requesting tax returns, W-2s, etc., but these have always been after tax season, probably when they pull some random ones or questionable ones to check up on.

I won't file a return that's not complete. But, I suggest parents in a hurry start with their prior year return and pencil in current year differences to estimate the various line numbers they need. Much of what the schools have been insisting on knowing has to do with savings, investments, IRAs, and for the Profile instead of FAFSA the FMV and mortgage balance on the house, as well as earned income. Except for the W-2 which the parent has also, I don't have that information, anyway.

I had one mom with two daughters at two different colleges both get financial aid "audits" within a year. All they wanted were W-2s faxed. Mom was very low income single mom of three, and daughters both attended very pricey schools on generous scholarships.

Don't let their crisis become your crisis. Or, at least, charge well for the rush job!

[Burke]

Do you have any clients putting pressure on you to get their taxes done or close so then can file an app with FAFSA?

Does FAFSA use AGI or what to determine eligibility?

Yes, but all those came in prior to March. It uses total income and taxes paid and also value of bank accounts, etc. It's pretty self-explanatory. It's amazing though how they don't have a clue where to get the info.

[AJsTax]

I ran into that problem

with my own son, I did the FAFSA online with estimates before 2/15 and then got caught up with the school's audit, which can be random, and had to have a completed and signed return into the financial aid office by 3/20 or take the chance of missing out on some financial aid.
They were very unforgiving when I called them about the dealines.

[BP.]

Yes, but all those came in prior to March.

Yes, lots in mid-Feb. For regular clients, I let them know that I'm putting them in the front of the pile. Then charge a bit extra for the "in-plant rush." I mean, doesn't UPS or Fedex charge more for expedited delivery? Clients are delighted I can help them meet their deadline.