<p>If a family member wants to donate money to our DD to use for tuition - is it better for them to give it to us, then we use it? Or is it ok for them to give it directly to her? </p>
<p>Is there a tax implication? We don't often have money donated to us, so we are not sure. :)</p>
<p>The same question goes for any online crowdsourcing - should that be set up in the student or parent name? </p>
<p>To the person donating, there is no difference or tax due as long as the amount is under $14000/yr (per person). </p>
<p>The difference will be when reporting it on FAFSA for 2015. You daughter would have to report all sources of money received and it could be counted against her.</p>
<p>For the money donated through a ‘fund me’ source, I think it is unearned income for either you or your daughter. You may consider it a gift, but the IRS may have another designation, such as unearned income since you can’t trace it back to one source.</p>
<p>Thank you - will look into the implications of that. It’s a very unique situation with her and she has many fans and supporters who are not local to us. Was thinking this sorts of pages would be an easy way to have them contribute to getting her to that big dream/big city school. Will do some research on the implications of those funds.</p>
<p>What about graduation gifts (of money) to her? Seems like a silly thing, but she might get some sizable “gifts” at graduation to help with tuition and want to be sure she is not penalized on the FAFSA next year.</p>
<p>We’d have one each year. This is the way we raised money for her summer programs. We are fairly close, without taking Parent Loans and without her going over the max student loans. We’ve asked the university to consider an increase in need-based aid to help bridge the gap, and i am looking for either a ft job or another pt job. we work in education, so will be working all summer long. we haven’t committed yet, but are working like crazy to see how close we can get. we went to admitted student this weekend and wow - this is the opportunity of a lifetime. </p>
<p>Just found this in regards to crowdsourcing funds. Thought it was interesting:</p>
<p>Potential tax liabilities</p>
<p>Certified public accountant Howard Kass is a Partner with Zinner & Co… He said if you are raising money for a personal need there is no recognition of income, but the money would be deemed a gift. If the gift exceeds $14,000, then you may have to file a gift tax return. </p>
<p>Yes, the person receiving the gift doesn’t pay gift tax. However, if the money is pooled in a non-501c3 fund, I’m thinking it is unearned income and not a gift. Do people actually report this on taxes? Most don’t, just like most don’t report babysitting money.</p>
<p>FAFSA is not the same as taxes. If you receive a gift, you are expected to report it. Do people report their graduation gifts? I doubt most do. However, if you suddenly have $15000, the school might want to know where it came from. But I doubt they will come looking for where it came from unless they are questioning some other part of your aid.</p>
<p>This is not.a gift. This is a fundraiser. Many states require filings for fundraiser…depending into the kind done. </p>
<p>And what is required for tax purposes really has no bearing on financial aid.</p>
<p>If you suddenly have $15,000 when you have already indicated you need additional funds, it is very possible the school will question where these additional funds came from.</p>
<p>Thanks, @thumper1. Fact is we don’t have anything right now and are just figuring all this out. What about money from grandparents, family and friends? That are simply checks? Are those considered gifts? I guess I don’t quite understand - will those gifts this year have bearing on next year’s financial aid? Or is that why we should have people give US the checks and we pay the tuition? I mean - if we have a $12K gap, and they do not issue any additional funds - we need to get that money somewhere if we are to send her there - right?</p>
<p>Sorry if this doesn’t make sense. My head is swimming with all that we need to do. I work PT and need a FT job, and of course, I KNOW that will impact our financial aid for next year - although we do need the money. </p>
<p>We are a very frugal family, no cable (free broadcast thru antenna, we have our own chickens, no dining out unless we have a gift cert from a birthday, no vacations, no ski trips, driving old cars, no savings and living pay-check-to-paycheck - doing the best we can. It’s tough sometimes, but we have never feel bad for ourselves. We are rich in many other ways - just not monetarily. We have been very creative with getting together the money to send her to the summer dance programs - and this is not much different - except the stakes and amount is higher. Of course.</p>
<p>Now I’m wondering if I got a FT job, if that big need-based grant would go away? Is there a way to find out that? Is that a stupid question? I mean, of COURSE I need to make more money (FT jobs are rare as hen’s teeth around here) and I likely wouldn’t make as much the grant is.</p>
<p>The ‘somewhere’ can be loans, then use any gifts to pay your loans. I wouldn’t have any of this gift money go into her bank account, just yours. Her savings are assessed at a higher rate than your savings.</p>
<p>Yes additional family income reduces need. Play around with the college Net Price Calculator and see.</p>
<p>the money needs to be given to the parents so it wont count on fafsa. Parents dont report money gifts given to them. students have to report money gifts on fafsa.</p>
<p>@moregrayhair I just wanted to commiserate. We are in the same boat. Your description of your lives (down to the old cars and chickens and only eating out on gift certificates) describes us exactly. I am also working PT and looking for more work when I recover from surgery, but, yes, that will decrease the grant aid. I entered various amounts into the Net Price Calc to get an idea what the impact would be. I’m also looking through our various belongings to see what I might be able to sell.</p>
<p>Good luck! Your D is fortunate to have a family that will help make this work, I’m sure :)</p>