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FAFSA & Your U.S. Tax Return - What You Need to Know

FAFSA & Your U.S. Tax Return - What You Need to Know
Ines Zemelman, EA
15-Apr-17

Congrats! Little Janie and Johnny are off to college, you did your job.  But - college isn’t free and your young scholars may need some assistance to pay for their degrees of higher learning.

Along with scholarships and other merit based programs, the Federal Government helps to pay for college via FAFSA (Free Application for Federal Student Aid)In order to file the application to help the young whippersnappers pay for school, you must provide information from your U.S tax return.
 

2016-17 or 2017-18 FAFSA - Use Data From 2015 U.S. Tax Return

When completing a 2016/17 or 2017/18 FAFSA application, use information from 2015 U.S. tax return.

- If you will attend college from July 1, 2016-June 30, 2017, you should submit the 2016-2017 FAFSA. You will use income and tax information from 2015.
- If you will attend college from July 1, 2017-June 30, 2018, you should submit the 2017-2018 FAFSA. You will use income and tax information from 2015.

Note: Both the 2016-2017 and 2017-2018 FAFSAs ask for 2015 tax information.

How Do I Account for 529 Plans on FAFSA?

When completing the ‘net worth investments’ section as a parent, if you have one or more education savings accounts (ie - 529 Plan) - report that plan for every dependent child you have, even if some of those dependent children are not currently completing a FAFSA.  Ie - if Jackie is 17 and headed to college, but little Jimmy is only 6 years old but has a 529 plan, report them both under the parents’ net worth investments.

What Information Do I Need to Input From My Tax Return Into the FAFSA Application?

The FAFSA form makes it easy for you and specifically indicates what line of your tax return to pull the information from.  Although the terms may be confusing, the form tells you exactly where to look.

I Have Yet to File A 2015 Return - What Do I Do?

In absence of a completed 2015 return, submit the FAFSA application using estimated tax information, and correct information after you file your return.

Can I Use Figures from My Foreign (ie. French or UK) Tax Return?

No - these will not line up as the U.S uses a calendar year to report earnings (Jan 1 - Dec 31) and the figures must match accordingly. Please contact your tax advisor to get your tax return prepared ASAP so that you can complete your application correctly.

How Do I Estimate My Adjusted Gross Income? What Were My Spouse’s Exemptions?

This part isn’t so easy. Many of these tax jargon terms are not so easy when you can’t pull them directly from your tax return. Please consult your tax advisor to get your return prepared ASAP so that you can complete your application correctly.

I Completed My Return But I Don’t Have A Copy - What Do I Do

If you are a TFX client and did not keep a copy of your return, that’s no problem. Please login and the file will be in your 2015 folder of your documents section. If you are not a TFX client and did not keep a copy of your tax return, here are some options:

1) If you self-prepared the return, please open the tax software you used and re-print a copy.
2) If you used a preparer, please ask them for another copy. They are required to maintain records.
3) Download tax transcript from the IRS - Transcript 
4) Order transcript by mail --- Call IRS automated line at 800-908-9946 to order a transcript by mail. Or use the online link above and a transcript will be mailed to the address on your return within five to 10 days.

Ines Zemelman, EA
Ines Zemelman, EA
founder of Taxes for Expats