Between the time I last scanned this thread and posted my last message to you, you offered information that directly answered my question asked in my last message.
I am so sorry for missing the overlap.
Thanks for understanding and sorry, again,
VM
@VinnyM please read this sentence again…and again…and again. And again. Does your family have HUGE assets that you do not want to have to report?
In addition…as noted by everyone…why are you doing this now? Should have been done in October. With an amended return that qualifies you for the simplified needs test…when previously you didn’t…you most likely will be selected for verification. That process takes TIME too.
And make sure your parents order a tax transcript once their amended return is completed.
Just have to ask…what was your FAFSA EFC this Academic year? How much Pell did you and your sister each get?
Ah…found it buried in your wall of text. Was YOUR EFC also $2596? Did you each receive a $2500 or so Pell Grant for this academic year?
And please…read the link I posted upstream on how to do these quote boxes. Your posts are VERY hard to read.
Your parents had $34,000 plus in itemized deductions. What were those? Are they positive they are eligible to file a 1040A form?
Also since your QEE was higher than the scholarships, did your parents claim AOTC for you (and your sister) in 2017?
Yes, my timing comment was aimed at deciding to amend a 2017 return at this late time, when it is almost time to file a 2018 return, and will delay the FAFSA filing and aid awarding process.
A change in parent income on the FAFSA of $1,000 nets maybe a $300 change in EFC. Do your parents think this is all worth it if they will pay $1,600 more in taxes?
Now if they were eligible to claim $1,600 in AOTC (times two?) and didn’t, then that would be worth it.
The simplified method only disregards assets of parent and student. Not cause a $0 EFC.
You can go to Collegeboard EFC calculator and run the EFC (federal methodology) both ways, and see for yourself.
Although it is based on 2019/20 EFC formula now, you can still see that change of EFC from $0 to $1,000 tax paid.
The college reported on the 1098T what was billed in 2017 and scholarships received in 2017. So the end result for 2017 might be no taxable scholarahips based on the 1098T form.
But it might be that they reported two semesters of billed tuition, and only one semester of scholarships.
So most likely you will have taxable scholarships to report for 2018.
I am confused because you said that 2017 is the year you started college, and then you said you and your sister both were freshmen in 2018/19 and sophomores in 2019/20.
The reason I asked about your sister is because with two in college the FAFSA EFC is halved. If one of you finished college a year earlier, the other one’s EFC would double.
Also, 1098T aside, what kind of aid did you have from your college?
If the scholarships only paid for tuition, then you could still claim fees and books for AOTC.
The Pell Grant can become taxable by using it to pay room and board.
If the EFC was about $2,500 then the Pell Grant was probably around $3,000 so that would be lower than the $6,350 standard deduction for dependent in 2017.
Are your parents self employed? Or what? What was their total income…and what did they deduct that made up $34,000?
And…this is very important. While there is a simplified needs test for the FAFSA, there is NO simplified needs test for the Profile. Yes, you might get additional Pell money if your assets really are not counted…but your total aid cannot exceed the cost of attendance. Keep that in mind too.
Do your colleges meet full need? Will any institutional aid be reduced by your increased Pell amount? Find that out.
Yes, I will read the thread on quoting messages.
Sorry for not reading your message on quoting earlier.
Sincerely,
VM
To qualify for,the simplified needs test…in addition to that 1040A, your family annual income would need to be less than $50,000. With $50,000 in income, how would your parents have $34,000 in deductions…that $34,000 would be the bulk of their take home pay. Right?
My father was quite embarrassed when he informed me that the $34,000 was paid from savings, liquidation of stock, and credit card debt. (I hope having this information was helpful.)
I am going to play some ball with my little brother… I will be back soon.
I am not a tax expert. But I am confused by the statement that the $34,000 in “deductions” was “paid” from savings, liquidation of stock, and credit card debt. “deductions” aren’t paid, and credit card debt is not deductible.
I think he was saying that the high medical expenses were paid for with savings and credit cards.
We are assuming that the bulk of the itemized deductions were from medical bills.
If the family had only $50,000 AGI, then paying that much for medical expenses from income would be difficult.
Thank you, @mommdc. Your explanation makes sense.
Are you saying your parents paid for medical expenses beyond what was covered by insurance in the amount of $34, 000 in 2017? And they used savings, credit cards, and stock liquidation?
@BelknapPoint can someone who has liquidated stock file a 1040A or EZ?
I was wrong about the stock liquidation. He said it almost got to that or early IRA distributions, but didn’t.
Do your parents get any dividends from their stocks? If so…how much?
Good Morning and Happy New Year.
My family returned from my grandmother’s house around 5:30 a.m. this morning after driving approximately 17.5 hours.
Prior to leaving, I had reviewed up through Message #44 and drafted a response to those remaining messages that either asked me one or more questions or caused me to ask one or more questions.
Unfortunately, while packing to leave, I inadvertently responded DO NOT SAVE when closing my working document for this thread having last saved the file only after drafting a response to Message #35.
My plan is to draft responses to those messages from 36 to 54 that ask me one or more questions or cause me (or my sister or my father) to think of one or more questions all while trying to elimination duplication of answers and questions.
Wish me luck and Godspeed!
VM
I need to go get the tax info from the car…
In the meantime, I am curious why that is an important number.
Thanks!
VM
Is there a limit on the dividend income amount to file a 1040a?
Not that I am aware of. Note that starting in tax year 2018, the 1040A and 1040EZ will no longer be available.