Hello, I just finished the FAFSA for my daughter, reporting my income of 40k and a 100K asset (in a family stock, which is not a liquid asset) and received this number for EFC:023069. Does that mean that I look like I can pay 23,069 of my 40 K salary? There was no place to explain the unavailabilty of the asset, as there was on the CSS form. Should I send documentation of this to the schools she has applied to, or try to modify the numbers when I send my updated tax info? She has already received a full tuition merit scholarship from Fordham and close to that for Northeastern, but her hope is to attend Vanderbilt, Yale, or Brown. Many thanks for any advice.
If your income is $40k you might have been able to qualify for simplified needs test
Did the FAFSA ask any questions about household receiving federal means tested benefits after you entered your income?
Are you able to file form 1040A?
you likely made a mistake
look to see if you put the income or asset in the student section.
I don’t file the 1040 A because I have a small business and also a mortgage so I use deductions. I don’t qualify for any benefits so I answered no to those questions. I also reported child support of 10K but that will be reduced by at least half when my daughter graduates from high school.
If you don’t itemize deductions could you use form 1040A?
She might Be required to use the regular 1040 with that stock thing, and because she owns a small business.
The question is were you ELIGIBLE to file a 1040A or 1040 EZ? I’m guessing not…mostly because of the business.
Did you get any dividends from that family stock? Is $100,000 YOUR share of it…or the total value?
Also, your small business could very well have an effect on need based aid awards. Very often, deductions lowed by the IRS are not allowed for financial aid calculation purposes, my are added back as in me.
Is $40,000 your after tax income…or before tax?
I dont think I am eligible to file the 1040 A or EZ. I get dividends irregularly, usually about 4k per year. the 100k is my share. I just started a catering business but it is very small and has no value at the moment. The 40K in income is before tax. Thank you. I am assuming that there is just nothing I can do, perhaps in terms of federal aid there is no room to explain that the asset can’t actually be used toward college.
This
Likely many deductions for the catering business were added back in.
You may not be able to sell the asset but you can likely borrow against it? (I’m assuming that this is the logic used for financial aid purposes). There is no scenario where you are better off without the asset than with- or presumably you would have sold/donated the stock and either taken a loss or taken the deduction.
I seem to remember you posted a while ago asking about valuing this asset- if I’m not confusing you with someone else. Perhaps you have a family member who will buy you out? Sounds like the cash is more valuable to you than the ownership…
Yes, that was me with the prior post. The family is not currently on board with a buyout. I guess I was just surprised to have such a high EFC since my income is low and I thought that according to the 5.64 percent formula and part of the asset being protected that it would be better.
@“Erin’s Dad” This is FAFSA, not CSS. There is no adding back in deductions for FAFSA.
Looks like there is either a mistake, the CS is the trouble (and would need professional judgement to reduce), or the mom is putting a lot into retirement.
The $4k in dividends will have a harsher calculation.
The first most seems misleading. Does the $40k in income include the $4k in dividends? the child support?
Your DD has high hopes for schools that use CSS Profile and NCP info. Some of your business deductions willl get added back in.
Also…you note that neither parent has remarried. Have you considered what would happen at CSS schools that require NCP info if your exH married someone with a strong income?
What are her financial safeties?
When the CS reduces by half, is that for another child? or is that an amount ordered for a college student? Will dad help pay for college?
OP, you may be qualify for the “small bussiness exclusion” See http://www.finaid.org/fafsa/smallbusiness.phtml
Not by the FAFSA but yes by colleges that use only the FAFSA to determine need based aid. Many of these schools will ask for the full tax return including all schedules. The business schedule will clearly delineate all,those deductions. And for institutional aid…they might get added back in.
So…the OP has $40,000 in income…$10,000 in child support, $4000 or so in dividends…anything else?
@Erin’s Dad, Thumper1 I made 36K from my regular job, 4K in dividends, 10K from child support, which will reduce by half (it is for my two kids, I also have a son who is a freshman). Her dad wants to help with college but has huge cash flow problems so I am unsure what he will commit to. Her financial safeties are Northeastern and Fordham because they have offer full or near full tuition. Also Alabama. I appreciate all of the input.
Well at least she has some great affordable choices!
The child support for 2015 was the full amount for 2 kids, right?
Then for 2016 it will be half after D graduates, so $5000 for Jan to June and $2500 for rest of year, total of $7,500?
I guess you could ask the college for professional judgment because child support will lessen and for the $100k stock that can’t be sold. It would depend on school how they handle that.
Any chance that ex would still continue child support until D is out of college?
If your child gets into a school that meets need, talk to the financial aid office about your situation. They may make adjustments for you (then again, they may not … but you won’t know if you don’t ask!).