Student Financial Information | Step 9
Step #9 of the FAFSA Online Guide to the FAFSA Form tutorial follows. If you have not read through steps 1-8, we suggest you start with step #1. If you are ready to file your FAFSA application or Renewal FAFSA form online, then please click here.
Student Financial Information
You should always file a tax return, even if you do not have any source of income. Filing tax returns of $0 is actually a good thing, because it's additional documentation that you have no income, and therefore demonstrate need. If you need to contest the results of your FAFSA later, having tax returns showing little or no income will help you.
We now head into the most data-intensive portion of the FAFSA, student financial information, as shown below:
Starting February 3, 2013, students can use the IRS Data Retrieval Tool to auto-fill the tax section of the FAFSA.
Tip: your local community bank or credit union may offer free or low cost financial planning including tax preparation. It is a good idea to take advantage of these services if they are available.
Tax tip: Beginning in 2010, there were some new tax breaks implemented for students. Required course materials are now deductible on your taxes, and the Hope Credit has been extended to four years instead of two. Consult IRS Publication 970 and a qualified tax professional for more information about claiming these benefits on your taxes.
The question about which tax form you will file is useful in that if you qualify for filing the 1040A or 1040EZ tax forms, some questions in the FAFSA process will be skipped, which can save you time. To answer the question about which tax form you will file, use these eligibility lists:
To qualify for the 1040EZ:
- Your total income is under $100,000
- Your interest income is under $1,500
- You have income only from wages, interest, unemployment compensation, and Alaska Permanent Fund dividends
- You and your spouse are under 65 years old
- Your filing status is single or married filing jointly.
- You do not have any adjustments to income
- You are claiming only the standard deduction
- You may claim the Earned Income Credit
- You are not claiming any other tax credits
If you meet all of these conditions, you are eligible to file the 1040EZ; note this on your FAFSA.
To qualify for the 1040A:
- Your total income is under $100,000
- Any age, any filing status
- You have income from wages, interest, dividends, capital gain distributions, IRA or pension distributions, unemployment compensation, or Social Security benefits
- You can claim the following adjustments to income: penalty for early withdrawal of savings, IRA contributions, student loan interest, and jury duty pay given to your employer
- You can claim the following tax credits: Child and dependent care credit, Credit for the elderly and disabled, Education credits, Retirement savings contributions credit, Child tax credit, and Earned income credit.
If you meet all of these conditions, you are eligible to to file the 1040A; note this on your FAFSA.
Regardless of which form you are eligible to file, when it comes to actually filing your taxes, you will probably want to use a full 1040 form to take advantage of various education tax credits, student loan interest deductions, and more. Contact a qualified tax professional to get the most out of filing your taxes.
On the question about your 2012 adjusted gross income, you will see an income estimator button. Clicking on the button will open this calculator:
Note that this calculator for estimating your 2012 adjusted gross income is NOT as accurate as completing a 1040 tax form! Completing a 1040 tax form will give you a better idea of what adjustments can be made to your income, such as tuition and fees deductions and student loan interest. Your adjusted gross income is line 37 on the IRS 1040.
For the question regarding how much you earned from working, use the number from Box 1 on your W-2 or your total raw pay from your pay stubs to answer this. Do NOT use adjusted gross income, total tax, or anything other than wages earned from work.
>> Continue to Step 10: Student Tax Information