<p>EFC</a> Calculator: How Much Money for College Will You Be Expected to Contribute?</p>
<p>I think this is correct based on me doing it long hand and comparing results of the estimator</p>
<p>I am using this instead of FinAid</a>! Financial Aid, College Scholarships and Student Loans since they have not updated for this year.</p>
<p>Well I hope it is wrong. It does not show my D qualifying for the automatic 0 EFC which we should as the income limit went up to $30k this year and we meet all other criteria.</p>
<p>did you say "yes" to Receive Federal Means-Tested Benefits? (Please see Help ? for more information</p>
<p>I guess it's possible they missed that part, but they do refer to 2008 income and 2009-2010 EFC, but the help files refer to 2007</p>
<p>I have written a couple of times to finaid.org
I wish they would update theirs already</p>
<p>I just looked at the "detail' for my results and they are using the correct income and asset protection and adjustments for parent and student.</p>
<p>But my AGI is over 30K (but below 50K) so I don't know how that part is working</p>
<p>We don't receive means tested benefits. It did not ask the type of tax return question.</p>
<p>I just looked at the detail. It does not seem to take into account the automatic 0 eligibility. I am guessing the simplified needs is not there either. Have you tried running it above and below $50k to see if it ignores assets?</p>
<p>answer yes to means tested and see what happens</p>
<p>I answered that NO and it included assets in the calculation even though my AGI is <50K. but if I answered YES, it doesn't use assets</p>
<p>try it and see what happens</p>
<p>I think the way this calculator is programmed is that you need to answer yes to that for it to exclude assets(when you know they should be excluded) not sure how it will work for your scenario</p>
<p>Yes - answering yes worked for automatic 0 also. </p>
<p>So does your IRA plan and simplified needs look like it could be beneficial for you?</p>
<p>if I put 1750 into an IRA I get my AGI below 50K
I also have to not use my itemized deductions. The difference in my refund is about 400</p>
<p>The difference in the EFC is about 2500</p>
<p>It's practically a wash. I just really don't want them to not give him the perkins loan (vs taking the UNsubsidized 2K in stafford) and I want as much work study as possible. I know he will get the max of subsidized stafford. </p>
<p>So I will live with a smaller refund and pay myself the 1750 in an IRA and HOPEFULLY I will get the desired result in the FA award.
Whatta role of the dice. I could have to pay the extra $$ to NYU anyway (and I always end up paying more than I think anyway because their COA for room and board is lower than it's actually possible for it to be in reality - and I have no idea what next years room will cost because there are alot of options with different prices and you have to do a housing lottery - don't even ask!)</p>
<p>Glad the calculator gave you the desired result.
99% of people who use it probably won't know to do that (put Yes for simplified needs test).
Would it have killed them to put the tax return question thingy on there?</p>
<p>so if you put $ into an IRA that reduces your AGI for FAFSA? Sounds like the cutoff is 50K. Does it help if your AGI is 60-65 and goes down 5K? I was thinking about filing the EZ also and skipping the itemized deductions. I see you checked the difference in filing both ways--seems a good idea. good luck...</p>
<p>IRA into a ROTH Ira does not reduce your AGI, IRA into a Traditional does.
Not everyone qualifies for IRA if they have a 401K (like I do)</p>
<p>Run your numbers (both on your tax software, I use taxactonline, highly recommended and on the EFC calculator, there lots of scenarios. Too many to say what works for you.</p>
<p>I can say that if your AGI is <50K assets are not considered in EFC calculation (and you also don't itemize and are have to be eligible to file a 1040A) I can't say what works in your situation</p>
<p>So today i tried calling the fafsa people to get some information. All i was able to do was have someone read the response that is in their help book. Maybe someone here who is knowledgeable about tax forms can help.</p>
<p>Last year we filed a 1040 because we itemized deductions. This year we did not itemize deductions. We meet all the requirements to file a 1040A EXCEPT for the fact that we itemized deductions last year and we received a state tax refund in the amount of $210.00. Because of this we must file a 1040 this year. Our income is less than $48,000. If we were to use the 1040A and add the $210 (state refund) into our income our tax liability is the same as if we file a 1040. </p>
<p>We filed a 1040 this year. Does anyone know if we are legally able to answer yes to the question “if you filed a 1040 are you eligible to file a 1040A?” Or is the answer no, due to the fact that we actually were required to file the 1040 because of this tax refund and itemized deductions last year? (I know stupid question-but it just doesn't make sense to me.) </p>
<p>Next year we will definitely be able to use the 1040A as we did not itemize this year. I can’t seem to figure out how much difference if any this will mean in financial aid, unless filing the 1040A would make us eligible for the simplified needs.</p>
<p>The FAFSA instructions state that “if you filed a 1040 only to claim Hope or Lifetime Learning credits, and you would have otherwise been eligible for a 1040A, you should answer “yes” to this question” but does not mention having to file for a simple tax refund.</p>
<p>As you itemized last year and had a state tax refund this means you have to file a 1040 this year to report the state refund. You do not have a choice. This means you are not eligible to file a 1040a or 1040ez.</p>
<p>Exactly the same happened to us my daughters 1st year. I spent ages trying to find a way around it - there is none. Really irritating, I know. I am almost over it 2 FAFSAs later ;)</p>
<p>FinAid</a> | FinAid for Educators and FAAs | Simplified Needs Test Chart
1st line of items that make you ineligible</p>
<p>Okay, this is gonna sound crazy since I work FA...but I don't get the auto zero EFC. I meet all the qualifications listed on an earlier post, but haven't received a zero EFC in a couple of years. My kids have received free/reduced lunches for years and my income has never been over 30k and I don't have any assets.</p>
<p>It was $20k for 2008-2009 (and I think 2007-2008). I think before that it was $15k. The increase to $30 just happened for this FAFSA.</p>
<p>Maybe this year :)</p>
<p>I did <em>not</em> itemize deductions for tax year 2007 and filed a 1040 (claiming a state refund from 2006).</p>
<p>For tax year 2008, I will also <em>not</em> itemize deductions. I received a state tax refund for 2007. Am I eligible to file a 1040A OR because of the state refund, do I file a 1040??</p>
<p>I am pretty sure that, if you did not itemize the year you got the tax rebate, that you do not have to file a 1040. I am not a tax accountant but I remember frantically running the scenarios through turbo tax trying to figure out if there was some way we could 'not' have to file a 1040. The itemizing in the tax year of the rebate seemed to be what killed us.</p>
<p>I will have a look at the IRS web site and see if I can find the rules.</p>
<p>I went to the IRS site and looked at the pdf file of 1040A instructions;</p>
<p>on page 23, it explains the answer. I CAN file 1040A. :-)</p>
<p>I could not copy the paragraph that explains this but it's there on pg 23.</p>
<p>I think the relevant tax rule is in IRS publication 525
<a href="http://www.irs.gov/pub/irs-pdf/p525.pdf%5B/url%5D">http://www.irs.gov/pub/irs-pdf/p525.pdf</a></p>
<p>Page 21-22 - recoveries.</p>
<p>
[quote]
State tax refund. **If you received a state or
local income tax refund (or credit or offset) in
2008, you generally must include it in income if
you deducted the tax in an earlier year. **The
payer should send Form 1099-G, Certain Gov-
ernment Payments, to you by February 2, 2009.
The IRS also will receive a copy of the Form
1099-G. If you file Form 1040, use the work-
sheet in the 2008 Form 1040 instructions for line
10 to figure the amount (if any) to include in your
income. See Itemized Deduction Recoveries,
later, for when you must use Worksheet 2 on
page 24 of this publication.
If you could choose to deduct for a tax year
either:
State and local income taxes, or
State and local general sales taxes, then
the maximum refund that you may have to in-
clude in income is limited to the excess of the tax
you chose to deduct for that year over the tax
you did not choose to deduct for that year.
[/quote]
</p>
<p>I think the gist of it is that if you itemized and used State taxes paid as a deduction then you have to report the refund because it may have reduced your federal taxes, in which case you have to report it (so they can get back your under payment of federal taxes), and the only place to report it is a 1040 (not 1040a or 1040ez). If you did not itemize then the State taxes paid would not have reduced your federal taxes so you do not have to report the refund at all.</p>
<p>As I said, I am not a tax accountant (and you know that saying about a little knowledge being a dangerous thing..) so this is just my own understanding from when I was trying, unsuccessfully, to find a way to wiggle out from filing a 1040 in 2007. Be sure to check with a tax expert. Or if you use tax software run it through that and see what it says. Turbo tax finally convinced me I had to file a 1040 back then. </p>
<p>(I actually debated not reporting it :eek: , but I am very much a rule follower (and a bit of a chicken - never can be sure which is the more powerful)).</p>
<p>Thanks for the info!! I actually realized that I claimed a state refund in 2007 that I did not have to... Doh!!! It doesn't change much for me vis a vis college, but I am glad that I have the actual IRS document now that explains the reason why I do not have to claim the state refund on 2008 taxes.</p>
<p>Now my question is, does Turbo Tax automatically use a 1040? I would like to file a 1040A but it seems that most tax programs default to a 1040.</p>
<p>I want to be eligible AND use the 1040A!</p>
<p>We used turbo tax last year and were able to file a 1040A. I do seem to recall I (maybe - long time ago) had to go to 'forms' and make sure it filed a 1040A. If your taxes are simple enough for a 1040A you can also use the freefile option on the IRS website (assuming it is available this year). I did my son's last year and selected the turbotax option. (be cautious one of the other freefile options actually calculated my daughter's taxes wrongly and had her overpaying her taxes).</p>
<p>To be honest I messed about with taxes so much on turbo tax last year - doing the estimates for FAFSA, then correcting the estimates (and actually forgetting to correct some estimated figures and almost filing with them ) that I find it hard to remember exactly what I ended up doing!</p>
<p>I am of the same mind as you - I wanted to be eligible and file the 1040A. We always get verified so I didn't want any complications.</p>