Student-owned and parent-owned 529 accounts are reported as a parent asset in question 91 (net worth of parents’ investments).
Can you clarify what you mean by “I move money from S17’s when it’s time to make a payment for the older boy and then move it out.”?
I have a 529 in each of the boys’ names. S17’s has the most money. I am on a payment plan with the other boys’ schools. A week to 10 days before a payment is due, I transfer money from S17’s 529 into the other accounts and then pay the other boys’ tuition with it from their accounts. The 529 people and my accountant both told me that it is legal to do so. What wouldn’t be legal would be to take money straight from S17’s account and send it to the other boys’ schools.
I didn’t report any 529 value on the FAFSA I filled out; however, that child has only about $100 in his. Do I have to list the total 529 amount I have (it’s less than $30K) or only the amount for the specific child whose FAFSA I am doing?
I’m a bit confused regarding listing colleges. If MIT is my top-choice but Princeton is my second-choice, does that mean I won’t get state aid if I decide to go to Princeton later on? Here’s what FAFSA says regarding Massachusetts and New Jersey policies:
Massachusetts
Grant aid awards will be made for the first eligible college listed on the FAFSA; however, you may update your choice at a later date to receive aid at a different school.
New Jersey
You must list a college located in New Jersey in the first position to be considered for state aid. You may update your choices at a later date.
How late can I update my order? I am applying to MIT for EA and won’t get a decision until mid-December. I will be applying Princeton for RD and won’t get a decision until March 31. I’ve been told that the earlier I submit FAFSA, the more money I get. According to the MIT website, they suggest finishing FAFSA by November so I can get financial aid information by January. Should I wait until I get my MIT decision in December and then submit FAFSA or do it now?
If the 529s are all parent-owned, then you list the total amount that you have on each FAFSA, exactly for the reason that you just mentioned: as a parent-owned account, you can use the funds in any of the accounts for any of your children. In other words, all of the money in any of the accounts is available for any of your kids. If a 529 is owned by the student, it is only reported (as a parent asset) on the FAFSA of that student, because the money in that account cannot be used for anyone else.
Of what state are you a resident? I wouldn’t be expecting state aid from New Jersey if you’re not a New Jersey resident, or likewise from Massachusetts if you’re not a Massachusetts resident.
DH is on the phone right now with FAFSA customer service, but from what I hear he is getting no help. He had been trying unsuccessfully to set up an ID, but the site won’t accept his name. Keeps telling him either the first or last name is wrong, and there aren’t even enough spaces to write it all in, which is weird because his name is pretty short. Any ideas?
I agree, put first the school that is instate to you. It is not guaranteed thaf you are accepted at either MIT or Princeton, but you can update with another instate school, hopefully you have instate safeties.
Question I have seen on Dept of Education Facebook page.
If parent and student are both college students, does that count as two people in household in college, or only if there are two siblings in college?
@TheGFG does your H have his social security card in front of him? The name should match what the social sec card says and hopefully matches what SSA has on file.
Can you try and make a FSA ID instead?
mommdc, his other information was just fine. Finally, after multiple tries, the computer allowed him to insert his full name and he was able to obtain an ID. Thanks!
You can start a FAFSA without the child having their ID. It will either be created as part of the sign and submit process, or can be created before that (which I think expedites the submittal and confirmation). I have my ID and S started the form. We were able to use the IRS data retrieval but won’t submit until he has an ID (and it’s the “brokest” part of the month).
@Atyraulove I agree, I really wish the data retrieval tool pulled in the W2 401K contributions, it’s all reported to the IRS already but doesn’t import (or add itself up). In your example either way it would have been counted, either as a straight asset or added back into income. In general the added back into income hurts a bit more. While they don’t look at the value of your overall retirement funds, the funds contributed in the base year do count. Super annoying!
@techmom99 you need to report the total value of all 529’s you have for any of your kids.
I had no idea the order of schools might be important. How does one find out that state information? It is unlikely to help us but I am curious.
The 401k contributions are only listed on the W2, not on the tax return. Since they are pretax contributions and not counted in taxable federal wages. That’s why the DRT can’t bring them over.
But the FAFSA considers them voluntary contributions and figures them into available income, as untaxed income.
My D has to manually list the taxable scholarships that were included in the AGI on her tax return, so that FAFSA can deduct them from her income.
So we will do data retrieval for our tax returns and then add the 401k number to question 94a and her taxable scholarships included in AGI in question 44d.
Last year, after doing the DRT, we added back in the 401k numbers. This was flagged to the school that we modified what was entered by the DRT. This makes sense if we modified something the DRT actually filled in for us, but that wasn’t the case. Anyhow, it flagged it so the school wanted to see a tax transcript. So be warned…you may need a tax transcript. Not a big deal, but they really should change how the FAFSA and DRT work in this case.
Parents in college do not count when determining the number of people in the parents’ household who are/will be college students.
I own Savings Bonds in my name and DD owns Saving Bonds in her name. Are these listed under investments for both of us?
Well duh, why do I never think to google, anywho yes they are added as investments. But this link says to report their current value not the face value, ugh, I’d of never thought of that. Now it’s going to be more work to look them all up:-(
http://finance.zacks.com/should-us-savings-bonds-input-fafsa-form-5656.html
@SeeksKnowledge , be careful when redeeming the Savings Bonds, because if you try to use them to pay all of your child’s net COA (including tuition, expenses, and R&B), you may end up owing tax on the portion that was used to pay R&B. My parents bought Savings bonds for our pups when they were born, as part of their college savings fund, and added a new bond on their birthdays for several years (before their health issues prevented them from continuing to do so). We liquidated enough to pay the whole first year’s cost, we were surprised when tax time came, as we mistakenly thought they were tax-free investments when used for education. Education did not count R&B. I wish someone had told us to think about this back then. It was not a huge tax amount, because S got some great FA and he declared it taxable to him, in his low-income bracket he did not owe tax, so we could take advantage of the Tax Credit for us. But I still wish we had known to think about tax implications of redeeming savings bonds, for the sheer hassle factor.
We made sure to pay the credit card bill from the summer vacation first, and an unexpected car repair and medical expense, then we pre-paid our winter heating oil, made next month’s car payments, and now that our assets are significantly reduced, we are poor again, so we filed FAFSA and completed the CSS Profile for D. It stinks to have so little in our accounts now, but after paying down just over $8000 for all these expenses, DH tells me that our EFC is lowered by roughly $500. To many of you, that’s no big deal, but to us, it means a lot. And since his employer gives a December Xmas bonus for the last paycheck in December, getting these FA forms filed now means we don’t have to show that as an asset.
@ClaremontMom, after doing the DRT you don’t change any numbers concerning the tax return. The 401k contributions are not part of AGI or Income from working so listing them correctly in untaxed income question 94a should not interfere with info that DRT transferred from tax return.
We don’t even have to list parent assets because they are below our asset protection allowance.