Tax Information Required | Step 10
Step #10 of the FAFSA Online Guide to the FAFSA Form tutorial follows. If you have not read through steps 1-9, 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.
FAFSA Tax Information
For income tax paid in 2012, refer to line 55 on the IRS 1040. Do not use line 75 ("Amount you owe"). This is a common and costly mistake. You want to use the amount of taxes you actually owe, as this offsets your income on the FAFSA.
For exemptions in 2012, this is line 6D from the IRS 1040. If you are claimed as a dependent on someone else's taxes (NOT the same as FAFSA dependent student), this is zero.
There's a long laundry list of financial items besides wages that follow. Check the appropriate boxes for any that you have had in the past year. Note that some of the checkboxes will spawn additional tips and text boxes if you check them.
- Hope and Lifetime Learning Credits: check this if you claimed these in 2012.
- Child support paid: If you have children, this is child support that you, the student, have paid to someone else to support your children.
- Work-study: Your taxable earnings from Federal Work Study will be listed on your pay stub from your college job.
- Grant and scholarship aid: This is for taxable scholarship aid reported in your adjusted gross income. Scholarships are tax free if used at a qualified educational institution and is used solely for tuition, fees, and required supplies. Using scholarship funds for room and board makes that portion of a scholarship taxable income. Ultimately, what is reported as taxable or tax free is your responsibility.
- Combat pay: If you are a veteran or on active duty, indicate your combat pay here. Be sure you report the taxable portion of combat pay specified in Box 12, Code Q on your W-2. Do NOT use the amount from Box 1!
- Cooperative education program earnings: Some schools have co-op programs where you work as an intern while still enrolled. This is pay earned as an intern in a co-op program. If you work for that company outside of your internship, your pay stub will likely have the different forms of pay split out. If it's just an internship, this will be just your pay stub.
- Deferred pension and savings plans: This question deals with retirement savings usually administered by an employer. If you participate in a retirement plan of any kind at work, this should be on your W-2 form that you receive from your employer by the end of January of each year.
- IRA deductions: This question deals with retirement savings usually set up by you or your parents. You should receive tax forms from those plans each year; once you have done your full IRS 1040, copy the number from line 28.
- Child support received: If you have children, this is child support that you, the student, have received from someone else to support your children.
- Tax exempt interest income: If you have earned interest on things like tax free savings bonds or other tax exempt financial services, grab line 8b from your IRS 1040. For some students, a portion of your college savings may fall into this category; contact your financial planner or tax expert for clarification.
- Unused portions of IRA distributions and untaxed portions of pensions: If you have received money from a retirement plan (cashed out), report the appropriate data from your IRS 1040. It is important to note that if you have rolled over a retirement plan from one company to another, or one plan to another, the rollovers do not count - only cash in hand counts.
- Allowances paid to clergy and military: If you receive any kind of stipend from the military, clergy, or other organization where you do not really get a salary, report that here.
- Veterans non-education benefits: Detail your veterans benefits here. This specifically excludes education benefits like the GI Bill. If you have any questions about veterans benefits, make sure you contact your VA education officer.
- Other untaxed income: Other untaxed income is kind of vague. Some examples shown are worker's comp or disability, but the more illustrative list is the list of what not to include, such as student aid (including scholarships), earned income credit, tax credits for children, welfare, Social Security, workforce investment, combat pay, flex savings plans, foreign income, and most other tax credits like special fuels. Chances are most people do not have anything to add here - if you think you might, you will want to consult a qualified financial planner.
- Money paid on your behalf: Did your grandparents pay for college or expenses? Any money someone else is paying on your behalf goes here. Use common sense for this question - if someone paid rent for you, it should go here, but someone buying you a Big Mac and fries can safely be excluded.
The final set of questions in this section deals with money you have on hand. This financial data is as of the day you file your FAFSA. Thus, if you are paying rent and have your monthly rent in your checking account, that pile of cash will count against you. If you paid rent the day before and there's nothing left in your checking account but crickets, that will work in your favor. Make sure you have as little cash in checking, savings, and other cash-equivalents as possible on the day you file your FAFSA.
>>Continue to Step 11: Complete and Sign the FAFSA