FAFSA question regarding items #93a/b

Paying for College
1

<p>D is a returning student. I am self employed, no moneys are withheld by an employer.</p>

<p>I may be asking a stupid question but it's the semantics which confuse me,</p>

<p>In doing the amendment to FASFA, there seems to be a discrepancy (at least to me) regarding # 93 (Payments to IRAs). When you click on the box to enter amounts (Additional Financial Info) the heading says this:</p>

<p>Untaxed Income</p>

<p>Report Annual Amounts</p>

<p>If a question does not apply to your parents, leave it blank or enter zero.</p>

<p>Did your parents receive any of the following items in 2009?</p>

<p>for:
93a. Your Parents' Payments to Tax-Deferred Pensions & Savings:
93b. Your Parents' Deductible IRA/Keogh Payments:</p>

<p>I (as parent) did not "receive"....but I contributed to these.</p>

<p>These figures then show up in the completed FASFA as:
Parents' Payments to Tax Deferred Pensions or Savings......$
Parents' Payments to IRA/Keogh/Other.......$</p>

<p>I contributed to ROTH IRA (and is ROTH IRA included in "Tax deferred savings" 93a?)
and to SEP IRA(tax deductible)</p>

<p>Do I enter these or not? I did not "receive" but I did make "payments".
I did not include them in the original FAFSA before tax returns were completed.</p>

<p>Last year I did include them, but I'm not sure I was right.</p>

<p>Thank you in advance for enlightening me.</p>

2

<p>Payments to tax deferred IRAs should be reported here. You shouldn’t include the Roth. A Roth is not tax deferred. </p>

<p>It is worded that way because you “received” untaxed income. If you earned $40,000 and contributed $3,000 of it to a tax deferred IRA then that $3,000 was untaxed income and not included in your AGI. You still received the income even though you put it in an IRA.</p>

<p>Contributions to tax deferred retirement accounts are not allowed to reduce your income for FA purposes. So the contribution is added back to your AGI in the EFC formula and included when calculating your EFC. </p>

<p>As Roth contributions are not tax deferred they were never deducted from your income in the first place, so are already included in your AGI. If you reported Roth contributions in this question last year then that income was double counted in your EFC calculation.</p>

3

<p>swimcatsmom, thank you so much…that clarifies it for me. Much appreciated.</p>