<p>If your son is looking at HYP I hear that Harvard and Princeton do not consider home equity but Yale does.</p>
<p>Colleges That Meet Full Demonstrated Need</p>
<p>Albertson Albion Amherst Arizona State
Univ. of Arkansas College of the Atlantic Bates Beloit
Bowdoin Brown Bryn Mawr Bucknell Cal Tech.
Carleton Case Western Res. Centre Univ. of Chicago
Claremont McKenna Harvey Mudd Pitzer Pomona
Scripps Colby CO School of Mines Barnard
Connecticut College Cooper Union (Free) Dartmouth DePauw
Dickinson Duke Florida State Gordon
Goucher Grinnell Guilford Harvard
Haverford Univ. of Hawaii Illinois Inst. of Tech Univ. of Illinois
Knox College Lawrence College Macalester Marlboro
M.I.T. Michigan State Univ. of Michigan Middlebury College
Univ. of Missouri Montana Tech. Mt. Holyoke Northwestern
Oberlin Occidental Ohio University Univ. of Penn
Princeton Univ. Rice Ripon Univ. of Rochester
St. Mary’s (MD) St. Olaf Smith USC
Stanford Univ. Swarthmore Trinity (CT) Trinity (TX)
Tufts Union College Wabash Wake Forest
Wellesley Williams Yale</p>
<p>Additonal advise from another poster, thumper1:</p>
<p>This is fine advice if your daughter is at the top of the admissions game. Most schools that meet 100% of need are HIGHLY competitive in terms of admissions. Getting IN to the schools is the challenge. You should also consider looking at FAFSA only schools especially if you own your home. The FAFSA does not consider home equity in the equation for finaid. Profile does. And look for schools where your daughter would be at the high end of students admitted...and where merit aid is offered (those 100% meet need schools mostly have only need based aid...no merit). She may find herself getting a good scholarship. AND look at your own instate universities. Most provide a good college education at a more reasonable cost. If your child is a high ender, the honors college programs at the big flagship U's can be wonderful.</p>
<p>swimcatsmom; THANK YOU for the reminder re state income tax refund and the 1040A. I knew about that but had forgotten it. </p>
<p>Is there some way I can insure that I owe state? Can I have zero state tax taken from my paycheck?</p>
<p>calmom: I am not sure I understand this:</p>
<br>
<blockquote>
<p>It's a losing proposition, especially since the aid formulas only take 5.6% of your assets into account, after a small asset protection allowances. Truthfully, you could probably invest that money to earn a better return than 5.6% and actually come to a point where you would just about break even, using the income from the fund to pay for your EFC.<<<</p>
</blockquote>
<p>You have $300K in CD's (I'm leaving off the home equity for now). </p>
<p>At age 52, you have an asset protection allowance of $20,500. </p>
<p>So, if assets are taken into account - either because you have to file a 1040 or because a private college decides to look at them -- $280K will be considered. The FAFSA formula for that money means that your EFC will go up by $15,680 because of those funds.</p>
<p>Suppose you have that $300K invested in funds that yield 7%. 7% of $300K=$21,000. $21,000 - $15,680 = $5320. </p>
<p>It's not quite that simple, because your $21K is income that also adds to the EFC. But the point is, the money potentially yields more than the level it adds to EFC. </p>
<p>As a single parent with one kid, you also have a $15,000 income protection allowance -- so disregarding earned income for a moment, you can look at the $21K yield on the money as adding $6K to income for purposes of EFC calculation, which by itself adds 22% to the calculation (22% of $6K= $1320) -- so you can look at that $300K asset as yielding $21K but costing you $17K in increased EFC ($13,680 + $1320=$17K). Leaving you with a net benefit of $4K.</p>
<p>No matter how you do the math, the more money you make and keep, the more money you have in the end, assuming a college meets full need. That's because your EFC rises as your income+assets rise, but only as a fraction of the total -- more money means you have to pay more to the college, but it also means you have more left over in the end.</p>
<p>calmom: I follow your line of thinking (impressive!), but the 7% yield is taxable income. So the net might be less than $4K. I think.</p>
<p>At the moment, I am getting 5% on the CDs (taxable); I am a bit hazy on mutual funds, but I do know that I have an IRA in one that is supposedly a solid blue chip fund and it has barely risen 1% in 2007; so I am just not experienced in the mutual fund investment arena right now.</p>
<p>I do know from reading all of the fantastic information here shared so willingly by other parents that I need to change my W2 form so that I do not receive a state refund -- THAT is the only event that would require me to file a 1040 and insodoing, my assets are considered.</p>
<p>Im not a tax expert, so maybe some body could weigh in. </p>
<p>For finaid purposes, be careful with mutual funds, especially outside a retirement plan. Although there might be more potential upside with mutual funds and/or stocks as opposed to CDs, and I believe that most dividends received can be reported on a short tax form, any sale of funds, or simply a transfer from one fund to another in the same family of mutual funds I think has to be reported on schedule D 1040. So I believe that if you go the mutual fund route, it might create an issue with the use of the short form as a finaid strategy if for some reason you have to sell. Anybody?</p>
<p>Per 1040 line 10 instruction - none of your state income tax refund is taxable if, in the year you paid the tax, you did not itemize deductions. This seems to imply that you do not need to file a 1040 for your state tax refund if you filed a 1040A (did not itemize) the previous year.</p>
<p>DreamMom: I am not sure I understand. In 2006, I itemized deductions. I received a state refund for 2006 after filing a 1040.</p>
<p>Now, in tax year 2007, I do not think I will receive a state refund. And I will not be itemizing deductions because the standard deduction will be higher. I hope to file a 1040A.</p>
<p>I am not sure where to go with your information??</p>
<p>Linda: I am no tax expert and I mistakenly thought you had filed a 1040A for tax year 2006 :) </p>
<p>If you itemized and received a state refund for tax year 2006, don't you need to report the refund on your 2007 return? If you do not itemize for tax year 2007, I am guessing that you do not need to report any state refund (if you get one) on your 2008 return. Again, this is just my interpretation.</p>
<p>DreamMom:<br>
Yes, I absolutely have to claim the state refund for 2006 on my 2007 return. Thanks for pointing that out to me. THEN,by not receiving a refund from state in 2007, I will be able to file a 1040A in 2008, providing the laws stay the same and my situation does not change too much.
Linda</p>
<p>Lindacarmichael: For your son who will be starting school next year (2008), FAFSA will look at your AGI as reported on your 2007 federal tax return. For fed finaid, 2007 will be the base year. </p>
<p>as to the issue dreammom raised, to my knowledge, state refunds are reported on Form 1099G and must be reported in the year the refund was received. So if you received a state refund for 2006 in 2007, the money is potentially reported as income on your 2007 return. The question then is whether all or part of this refund received in 2007 for 2006 must be reported on a 1040 (long form) which would knock you out of the box for the simplified needs test or automatic zero.</p>
<p>I ran the numbers on the finaid.org calculator. The instituitional result looks like this:
Total Assets 410000
Asset Protection Allowance 20500</p>
<p>Discretionary Net Worth 389500</p>
<p>Parents' Contribution from Assets
(12% of DNW) 0
Assets were disregarded because the family
qualified for the simplified needs test.</p>
<p>Parents' Available Income 2497
Parents' Contribution from Assets 0</p>
<p>Adjusted Available Income 2497</p>
<p>Estimated Parents' Contribution 549</p>
<p>Does this REALLY mean an EFC of $549???</p>
<p>The only thing that may not be representative here is my home equity. I lowballed it at 160000 for a few reasons, one of which was that the FAFSA guidelines said to put in what a bank would loan you for home equity. If that is the case, I am thinking 160000 would be around the max as my income does not show I could pay them back.</p>
<p>Also, this is based on filing a 1040A and qualifying for simple needs.</p>