<p>I was planning on doing the Profile right around the third week of December because I will have the last paycheck for the year and everything else I need to accurately estimate my taxes. Most of the info I can get online. So I thought. I was going to plug everything into Turbotax, use those numbers to do the Profile, and then just double check and tweak it before I filed for real. Now it looks like Washington is going to leave us hanging til the last minute regarding AMT, and other tax breaks. Should I just go ahead and do it anyway? One of my son's schools needs it by mid-January, and I heard they suggest you do it a couple of weeks before the deadline. It could be off by thousands of dollars, but everybody who applied EA and ED will be in the same boat. I am a deer in the headlights!</p>
<p>With the uncertainty about tax policy we are all deer in the headlights. I guess we have to wait for Congress and the administration to agree on something. Don’t hold your breath.</p>
<p>Yes the failure of congress to address the AMT for 2012 will be disastrous for millions. I am so glad I only having returning students and not applying students. The biggest problem (next to those already pointed out) will be linking the tax return to the FAFSA. The IRS has not altered the 2012 income tax return to reflect the CURRENT AMT amounts so the tax forms/instructions would need to be revised if the AMT is not “patched” this year. </p>
<p>The IRS estimates that changing the forms will delay taxes for approximately 28 million returns. Those delays could even be pushed out after the April 15th deadline. Here is the problem: most colleges require the FAFSA be filed long before 4/15 and also be electronically linked to the filed tax return. The IRS takes about 4 weeks to make an electronic return available for linking to FAFSA. No one will be able to meet the college’s Financial Aid deadlines.</p>
<p>I feel particularly concerned for applicants who may get an estimated FA award and agree to matriculate based on that award. Then when the tax situation is resolved (long after the May 1 sign up) the student discovers drastic changes in the financial aid and is out of luck.</p>
<p>I have written to my Senator to request that Congress address the 2012 AMT problems immediately. The 2013 issues can be addressed after the turn of the year (as far as I am concerned). I wish all 28 million people who will get whalloped by the AMT mess would write to their congressperson(s).</p>
<p>Won’t your income be the same no matter what the tax rates are?</p>
<p>Financial aid is based on more than just income. Income is the same, the numbers for taxes paid will be different. It also affects the money we will have available to pay for school next year. Worse case scenario, we would end up owing a good amount of federal taxes. There has been the general consensus that there would be an AMT extension before the end of the year, I believe TurboTax even programmed their software that way. It infuriates me that they have to use everything as a bargaining chip, and wait until the last minute. I’m just going to do the best I can. I am still optimistic they can deal with this in a timely manner, if it drags on, we would have to weigh the idea of putting down deposits on more than one school to include an absolute financial safety.</p>
<p>My income will remain the same, but the AMT may cause an additional tax bill of @ $8,000. The Financial Aid Admin needs to know the exact tax amount (to deduct from my available income) and I need that money to pay tuition. If I were to file now (with the IRS assuming the AMT is patched) I would get less aid. If the AMT were (later) not repaired I would suddenly owe a lot more tax - I doubt the college would then bump their aid after all the financial aid has been awarded.</p>
<p>This is far worse for the applicants. I think RunsWS has the right idea but I don’t think you are allowed to double deposit. What can you do?</p>
<p>But Turbo Tax was only ever going to give you the income numbers and the tax numbers. Financial aid is not dependent on how much you have to pay in taxes. The income numbers you get from Turbo Tax will be exactly the same regardless of the actual tax laws in 2013. I agree that Congress is doing the nation a disservice by not taking care of business but I think you will be able to get a good estimate of income from Turbo Tax.</p>
<p>My understanding is the tax breaks would be retroactive to the current tax year. Therefore delaying decisions on which tax breaks are extended prevents the IRS from issuing tax forms on which tax programs are based. So the actual numbers could be quite different than what I am getting now.</p>
<p>I’m concerned about this…the tax preparation software that I use rarely lets me hit submit until all the federal changes are in. This will preclude being able to check the “filed” box for the FAFSA for my soon to be freshman and it will preclude using the import tool that they introduced last year. Profile is alittle more forgiving in my opinion. After doing this for 6 years with the two oldest, I’m really wishing I didn’t have a soon to be freshman this year.</p>
<p>The tax rates for 2012 are not in jeopardy. They will not change. The 2013 taxes are what are scheduled to rise.What I am worried about is the AMT - Alternative Minimum Tax. The amount of allowable income for the AMT has already been reduce to amount from 2001 - it is a separate issue from the 2013 “Fiscal Cliff” negotiations and has been seemingly overlooked in all the media drama.</p>
<p>The AMT is triggered if your income is >33,750 (single/HOH) and >$45,000 for married. Last year the amounts were $48,450 and $74,450. The AMT basically removes all/most of Schedule A deductions and taxes at 26% or 28% rather than the graduated tax.</p>
<p>Every year they have to adjust the AMT because when it was initially instituted it was not tied to inflation. They did not adjust the exemption amount this year.</p>
<p>The FAFSA does count income tax paid as an allowance against income in their calculations.</p>
<p>Please write your reps!</p>
<p>I have not heard for this year, but I have heard that in the past in general, the AMT does get adjusted because most of the reps are subject to this tax themselves.</p>
<p>Companies paying special dividends and accelerating dividends will increase income for 2012 if you hold stock outside of retirement accounts. Increase in income can decrease FA.</p>
<p>In TurboTax, certain parts will put up a message stating that the forms aren’t ready yet and TurboTax won’t let you enter the information. It says that an update should be ready on January 13, 2013. I ran into this and downloaded TaxAct and put my summarized pro forma data in there and was able to do some modeling, with and without AMT.</p>
<p>Good to know about TaxAct, thanks. Thank goodness I won’t have to do another Profile for 3 years.</p>