I have been separated for a little over a year, it is not yet a legal separation. It is an amicable separation and we are trying to do it without disrupting D before she goes to college. We file taxes as married filing jointly. Some bank accounts are separate, many are combined. We own 2 businesses together, each owns 50%. We own two homes, and D lives in the larger house closer to her school full time. Her father and I travel between the two homes.
Can I just file ONE CSS form, listing income and assets for both of us, and then in the notes section speak about the separation? Or do I need to file a CSS as the custodial parent, halving our assets. Except it asks a lot of questions that refer to specific lines on tax forms: eg AGI etc. It does not make sense to halve those figures, as that will not match the taxt forms when submitted.
I am clear that I only need to file one Fafsa and list only the custodial parents info. Not at all clear on the CSS.
You and your husband maintain 2 separate households with the intent of dissolving your marriage. You D lives with her custodial parent. This information goes on the profile. The custodial parent fills out a he FAFSA with their I formation
The non custodial parent fill out the non custodialparent.
@sybbie719 Thanks for responding but I am still confused. How do I answer questions like whats your AGI when that is autocomputed on the 1040 Tax form, and it is computed for both of us jointly? I can break out income and pretty cleanly. But there are a ton of things that were paid jointly: property taxes, mortgages, health insurance, medical expenses etc. There are also complex deductions like home office, unreimbursed business expenses… Some of the deductions, like medical expenses, are only deductable in excess of a base amount. So its super complicated to split things up!
Interesting situation. The married filing joint tax return is usually an indication that there is no divorce happening or a separation situation with the intention of moving toward divorce. You haven’t explicitly said that you and your spouse have the intention to divorce. Without that intention, it would be perfectly suitable (and in your case, apparently, much simpler) for your student to apply for financial aid stating that the parents are married, and living apart without a current intention to end the marriage.
I don’t think it is an uncommon situation. Many people file joint taxes and then decide to get divorced in the time between filing taxes and fafsa/css so they have to do the math on breaking things out. If you’d filed taxes separately, you’d have done the math then, but you didn’t so you have to do it now.
It would seem that css would give you a big benefit by filing as two separate households now. If you file as one household, you’d have one primary residence and the second residence would just be an asset. I think when the css is filed as custodial parent and NCP, the school has to assume there will be two homes, two sets of bills for utilities, two sets of living expenses. It may not make any difference in FA, but I can’t imagine it would hurt.
2016 taxes will be used for the 2018-2019 Profile that OP is facing. OP states that the separation began before the 2016 taxes were filed (in fact, at least several months before the end of the 2016 tax year), and yet a joint return was filed. This is what I consider to be uncommon. Yes, filing a joint tax return and after that filing making a decision to divorce, or to separate with an intent to divorce, would not be an uncommon sequence. But that’s not the timeline as presented by OP.
The key here, in my opinion, is what the intent of the parents is regarding their marriage. If there’s a legitimate question as to whether or not the marriage will continue, two Profile forms should be filed: one with a custodial parent, and the other with a NCP. Otherwise, the parents should be included on one Profile form as a married couple.
@twoinanddone @BelknapPoint The separation began in the spring of 2016, so straddles that tax year. Honestly w will probably file joint again this year. Divorcing/separating is expensive, and after 20+ years together we are in no rush to dissolve the relationship - more like a slow slide into a realization that the present and future does not include us being together as a couple, combined with a stressed D who does not need further stress from parents in an acrimonious separation. Do I think this marriage will continue: absolutely not. Are we in a rush to face the difficult questions that a separation brings : nope!
Clearly it is easier to file the CSS together, then write an explanation about the separation. But if that will have a large negative effect on the amount of possible financial aid then thats a tough path to take as we do not have the financial resources to take that hit. But also literally finding the numbers that the CSS asks for - in a way that can be backed up by taxes - seems very difficult.
I think the crux of it here is that we are certainly headed to divorce, but not there yet. In the interim we are maintaining separate residences. We own two residences and it is not like one is a disposable vacation residence, its a residence for one person in the marriage and a safe haven in the ongoing emotional storms. The equity in that residence is <$200k. I have no idea how much that “asset” affects financial aid.
You are allowed to file joint tax returns as long as you are legally married. Many people do it for a lifetime even though they don’t live together as married or co-mingle assets. Just as people used to get divorced for tax reasons and then remarried, some never get divorced for religious or tax reasons.
Based on the current separation and the intent to eventually end the marriage, I think the way to file Profile is with two forms, one including the CP and the other including the NCP. I know the numbers might be tough to come up with because of the joint tax filing, and the only thing I can suggest here is to go back and do the 2016 tax forms as if you were both filing as single to get the numbers required for the separate Profile forms. You can explain your methodology and the circumstances that necessitated it on each Profile submission.