<p>Hello, I am a student who has currently applied for FAFSA and Cal Grant.
I was wondering if I could get some help.
I have received my EFC number and it is quite high.
My parents' adjusted income is about $92,000; however, if you look at the income ceilings for the Cal Grant, the ceiling stops at $87,400.
Would it be helpful for me to use IRA to lower the adjusted income? Would it help me get more financial aid?
Are there any other ways for the adjusted income to be lowered?
Any quick reply would be very helpful.</p>
<p>Contributions to traditional IRAs (the ones that lower AGI) are added back in to income in the fafsa formula (fafsa question 94a). Any other actions to lower AGI, even if they exist, would have to have been done in 2013.</p>
<p>I think it is worth it to talk to a tax professional about this. If Cal Grant is based on AGI (tax form) the IRA contribution could lower you to below $87400… The question is whether Cal Grant uses the tax AGI or the FAFSA where the ira contribution is added back in. </p>
<p>It is certainly worth asking.</p>
<p>I looked into this last year as we were right on the edge. CalGrant uses a “modified” adjusted gross income. Adjusted Gross Income
- Total untaxed income and benefits
– Total additional financial information
TOTAL INCOME
The IRA contribution is added back in just as annoyingdad says as it is untaxed income. </p>
<p>The other thing that could possibly get you below the mark would be to pay more taxes, for example, not take a child tax credit that you would otherwise qualify for but you are $4600 off the mark so it will take more than that. The number that you posted is for a family of 4. IS that how many are in your family?</p>
<p>Look carefully at the first page of the 1040 in the adjustments. I don’t think any “above the line” adjustments taken on lines 23-35 are added back into income the way the IRA contributions are. Also look at losses, did you have any capital losses? That is another way to reduce the income but you would most likely know that by now, ie. cashed in some fund and took a loss. Do a sample tax return and see if you can make any adjustments.</p>
<p>You do know that there is also an asset ceiling, right? Not only do they have the income cutoff but your family has to meet the asset ceiling. This year it is $67,600. If you are over either the income or the assets, you won’t get the CalGrant. </p>
<p>Good luck. I hope you can find a way. </p>
<p>Floris…</p>
<p>Did you apply to UCs or CSUs? </p>
<p>If you get into a UC, even if you don’t qualify for a Cal Grant, you may still qualify for some UC aid. Did you use the NPCs on the UC sites? </p>