<p>I am unemployed (2 years - telecom, don't ask). my wife makes 105k. To supplement our income we have make substantial withdrawals from our 401k's over the last 4 years. Last year it was 40k. Our AGI on my 1040 for 2009 is 127k but it includes my 401k withdrawal. </p>
<p>Our household income is only 105k - can i state that as my AGI on FAFSA?</p>
<p>Thanks for any help.</p>
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<p>The FAFSA instructions are VERY clear. The AGI comes from the SAME line as it is on your tax return. You can’t just put another number in. The reality is that withdrawal from your 401K is income. </p>
<p>You don’t state where your kiddo attends college, but in many places (especially schools that do not meet full need), the difference between your EFC with $102K and $127K isn’t going to be that huge. In both cases, you will not be eligible for any federally funded need based aid except a Stafford Loan.</p>
<p>Were you hoping to get federally funded need based aid with an AGI of $102K?</p>
<p>Actually, on the College Board Calculator, it drops from 30k to 24k, significant in my book. my son is a high school senior. he is accepted at penn state, pitt, dickinson, wash & jeff and ursinus. waiting on some others.</p>
<p>i just want the most i can get.</p>
<p>No you can’t put $105k as your AGI if your AGI is $127k. You have to put $127. FAFSA has to agree with what is on your tax return.</p>
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<p>None of those schools meets full need. You will not qualify for federally funded need based aid with your AGI…except for a stafford loan. Perhaps the schools will have some grant money for you…but they do not meet full need.</p>
<p>Regardless…You can’t just make up any old number for your AGI. It MUST be the same AGI that is on your 2009 tax return…and that INCLUDES that 401K withdrawal.</p>
<p>You may get selected for Verification of the FAFSA (supposedly 30% of submitters are selected, but I have been seeing 40%) and then you will have to submit a form AND your tax forms, 1040s and W-2s, to all the schools that are working on a financial aid package. So you really want the numbers to match, since it is required AND it might be verified if randomly selected.</p>
<p>Wow, so 1-time income is considered to be in perpetuity by FAFSA. Well, I’ll submit “Special Circumstances” notes to the schools and hope that helps. Thanks for all the replies.</p>
<p>I’m not sure what you mean by in perpetuity? The FAFSA is filled out each year. If in one year you have a influx of money e.g. severance payment, withdrawal from an IRA or any potential one-time event it only impacts one year of FAFSA if you spend the money. Now if you don’t spend that one time payment during the year and it’s sitting in a bank account or equity account of something like that then yes, whatever that is is counted each year.</p>
<p>If it makes you feel better…I have to report as income any profits from my company. I don’t even GET that money (it stays there for working capital/etc.). BUT…I have the CHOICE to get that money. I have to report it and pay taxes on it and report it as income even if I don’t have the need to withdraw it. You’re at least ahead of that game. </p>
<p>We ALL want the most we can get, of course. It’s a tough time, to be sure. College costs have skyrocketed, our pockets are lean…most kids will NOT be able to attend a school they MIGHT have if our economy was in the shape it was… 5 years ago.</p>
<p>There’s something a little bit wrong with the fact that they are not allowed to use your 401k as a consideration for Aid, but if you have to make an early withdrawal due to duress they can count that.</p>
<p>Well, lemme just say then that I didn’t make the money you did this year, NOT counting what you withdrew from your 401k. And I HAVE no 401K (I do have a $8000 IRA). NO other savings, nothing. Yet, because the company made money- I had to pay the taxes on that AND…I am going to get virtually NO aid, even though I got a LOT lower salary than you. I am thankful anyone is even considering offering aid to anyone. I expected to have to pay “sticker price”…and it looks like I will. So my D applied to her in state financial safety because of this - so she could qualify for scholarships - because she probably CAN’T go to the more expensive schools. It’s just the way the financial cookie crumbles…and it’s the same for everyone. I’m happy for you that you had the foresight to save for a rainy day, and did HAVE an account from which to withdraw during lean times. I know you earmarked it for retirement, but…many of us are having to cash in those next eggs right now. Could be worse. Good luck to ya.</p>
<p>I know it stings. But really, you are in a much better position than many, many people since you still have one family member working at a very high salary. There are many professional people in our area where both husband and wife were laid off. People our age with decades of continuous work and with kids going off to college and an inability to even sell their house and move to a more prosperous area. If I ever feel a teensy bit sorry for myself I think about those friends and co-workers. It’s tough on the families, it’s tough on the kids whom we want to be able to give everything too and would have/could have a year ago or two years ago. Chin up. It could be alot worse for you. Alot worse.</p>
<p>“NEXT eggs”? Umm…correcting my own idiocy (OK, typo) to NEST eggs. Doh.</p>
<p>FAFSA question: We were told we had to complete a FAFSA even though my S is not applying for any need-based scholarships. He is a NMF and is also applying for several non-need-based scholarships. We haven’t done our 2009 taxes yet, so I was advised to file the FAFSA based on 2008 taxes and then amend it. Sounded good to me, so I did that. Took about 30 minutes, but I just guesstimated on savings/investments. With the crazy market, who knows what our investments are worth? But now I see in the posts above that some people get selected to verify their FAFSA. What would we do if we were told to verify based on what I submitted, which was based on 2008 taxes, when we clearly intended to amend the FAFSA to show 2009 numbers, and I planned to give a more accurate savings/investments amount at that time? Can we assume they wouldn’t ask us to verify since we don’t qualify for anything anyway? Clearly, if we were trying to defraud the system, we would have at least put in numbers that got us some $. (Not that we are rich, but we have saved for college since our kids were born, so we don’t qualify for FA. But we know people who make decent money, have no savings but super nice houses and cars, ski vacations, trips to Europe, and THEY qualify for FA. Aaarrgghhh!)</p>