Thanks, I don’t totally follow the 2nd part. Is there an answer to that question? How would I know that until my 2014 taxes are completed? or is it the $4000.?
At the most it would be $2500 which comes from having the max expenses of $4000. But yeah, you aren’t going to know that either until taxes are done. I was just pointing out that one won’t affect your efc either.
I think you are good to just estimate that she will have $4000 to $5000 in income, and have the FAFSA adjusted by the tax retrieval tool. The only thing that can’t be adjusted after pushing ‘send’ on FAFSA is the value of assets (unless a mistake is made in reporting).
Regarding Post #60: At most, the answer to the 2nd part of the question is $1500 which is the max nonrefundable portion of the max $2500 credit.
Pretty sure if tax owed is more than $1500 the non-refundable part can be greater than $1500.
Guess I’m wrong, $1000 stays on line 68 of the 1040 regardless.
^^Yep!
(The only thing that can’t be adjusted after pushing ‘send’ on FAFSA is the value of assets (unless a mistake is made in reporting).
Is that my assets or her assets?
Both. Assets are as of the date of the first fafsa submission.
Could there be any downside to adding the $4000. to her AGI? I normally don’t owe much money at the end of the year because I make estimated tax payments monthly. Usually I owe some money to the state but normally get a small refund from the Fed.
A refund is just a return of money that was over withheld. But even if your tax is reduced to 0 by the credit you could get up to $1000 back with the refundable credit. Similar to the EITC in that regard. The accountant should crunch the numbers for your entire situation and advise you. Given that her other income is low, I don’t see a downside on the federal side.
As I mentioned earlier in post #57 though, state could treat taxable scholarships/grants differently than federal and there may be implications for both NY and MS.
Thanks again, I’m going back to the FAFSA later . I fixed the washing machine (I think). It’s going on 19 yrs. so that refundable credit could come in handy.
Just to be clear, This is where I’m entering the $4000 correct? (Student grant and scholarship aid reported to the IRS in your adjusted gross income.)
Yes. Grant and scholarship aid reported to the IRS in AGI is asked both in the Student and the Parent section. You want the one in the student section, question 44d, not the parent section, question 93d.
@spunk61
Here’s a great link 4kidsdad posted in another thread. You should show it to your accountant, particularly the highlighted part. It primarily talks about Pell but in the 2nd paragraph mentions “many other scholarships”.
Thanks, I will print it out. Much appreciated.
I was wrong about her income, it was $1040. So on the question of how much was her AGI I’m adding the $4000 for scholarships and her $1040 income. That total should not effect her new Pell grant total though would it? Or is that just based on my finances? Thanks again
Pell grant is based on FAFSA EFC, which takes into account both parent and student finances.
But dependent students get a $6310 income allowance before it affects the student contribution to EFC.
OK , I think I’m ready to submit. Thanks for all the help!