Do they even need to be listed?
I have a few thousand dollars that I have saved up through teenage entrepreneurial bouts, but I’ve never actually had a job or an income and I’m not making enough for it to be taxed obviously. I have a savings account set up secretly that my parent’s don’t know about. I plan on saving up more money over college ( in similar entrepreneurial ways, I hate minimum wage work ) so that I have a decent amount of money after college to start investing in either a start-up or maybe just the stock market.
My family and I have used fafsa and css calculators and all the schools I have applied too will offer enough financial aid that my parents are comfortable paying.
Is this something that needs to be filed on the fafsa, and will I get in deep trouble if I don’t?
If so, how much of this money will I be expected to contribute?
Most definitely they need to be listed or it is fraud. Any aid you get will have been obtained by making a false statement when you were asked to report contents of checking, savings, or cash and subject to 20,000 fine and/or 5 years in prison. You would have to return any aid. And your school might dismiss you. You account could turn up in an audit. It is not worth the consequences.
There is nothing wrong with you having your own account, but money in it is assessed at 20 pct by the fafsa formula each year. Your parents savings, in contrast are assessed at a much lower rate. You might want to pay your parents for some of your expenses now. It is kind of funny that you want your own money not to go for school but so you can play the stock market while your parents pay. I bet they wish it was the other way around, lol.
@BrownParent my parents are paying next to nothing, 95% of my college expenses are being paid by financial aid and an inherited college fund from a relative.
It’s not neglecting my parents, believe me I have every intention to provide further down the road. The money coming from my few thousand dollars would not make much of a difference for my parents but would make a huge difference for me.
That being said, thank-you for your answer… but I have one more question.
What if had a checking account that is consistently gaining and spending money but is never over 300$. Would that be any different?
Well, you have to ask yourself if not reporting $300 is worth being dismissed from your college when they find out you committed fraud. So for $60 a year (20% of $300) you are risking what BrownParent said (fine, prison, loss of financial aid, dismissal from college). But you are talking about a “few thousand dollars” which makes the ramifications of not reporting even worse.
For FAFSA, you put the amount that is in the account on the day you fill out and file the fafsa. So the amount doesn’t matter if it is 300 or more or less, as long as that amount matches the account should you be asked to provide statements. I don’t know if they would ask about fluctuations, I don’t think so in this case but see if you get other answers. Note it is not okay to have 2,000 in it, then drops to 300 and you report, then shortly after rises back to 2,000. That is clearly avoidance of declaring the funds as even if it is in cash you have to declare it.
Note the following is to the best of my recollection without much sleep, I am not one of the tax guru’s here: Also as far as student tax goes, you have a protection of 6,000 before you have to file income tax on earnings. If you earn a paycheck that has withholdings you may want to file to get a refund. However as far as self employment tax, the IRS is not very flexible.and they require you file and pay self employment tax starting at a very low level, I think $400. So, while students don’t usually do that for a bit of babysitting money here and there, you will have to do this for regular income you earn for yourself from some enterprise. Gains from stocks are treated another way. So when the applications and aid forms are in you had better get a basic grasp on what is involved. There are easy youtube videos on self employment tax. You are not exempt for your age or anything. You might as well know how to keeps your books and paperwork in order if you have aspirations for a business or investments, keeping straight with the IRS is something to be on top of. Being caught out, there is no ‘I didn’t know’ and they are punitive and will lay exorbitant fines on you.
What are these teenage entrepreneurial bouts? You are hiding it from your parents - is this some sort of illegal activity?
Hopefully it’s something wholesome and clean, like a paper route, human trafficking, a lemonade stand, or murder-for-hire enterprise; if it’s something dark and sordid like drug dealing then it could compromise federal financial aid eligibility during college.
Anyway that’s all beside the point. You definitely do need to report amounts in your checking and savings account. There’s an asset protection allowance as people have mentioned but the actual dollar amount in those accounts at the FAFSA filing dates should be reported. Withdrawing the money and keeping it in your house doesn’t change your ownership of the money, but spending it does. FAFSA isn’t going to ask about the source so it doesn’t matter if the money is from a job, a business, a gift, etc. in terms of whether or not it’s a student asset.
Ypunare required to list your assets as of the date of your initial FAFSA filing. This includes all money you have regardless of where it is located. It can be in your checking, savings, under your bed, in the freezer or on the moon. You are required to list it on the fafsa. Period.
Thank-you all for your answers.
No I am not dealing drugs or anything illegal.
While it is not illegal, i will say it would be frowned upon by my parents which is why I am keeping it secret from them.
If you have been playing the stock market, you could owe taxes on your capital gains. So read up on that too.
i havnt been i only plan to