<p>Me and my wife separated in April of last year. She wants me to file this years tax returns as Married filing separate in order to have a better chance of her getting financial aid. Will this do any good or will my income still have to be reported on the FASFA forms? Also we aren't "Legally Separated" as there is no Legal Separation in Virginia but we have lived at separate addresses since April.</p>
<p>I know that our tax returns we'll be less this year filing this way, I just wanted to see if there was any benefit on the FASFA for filing separate.</p>
<p>It is up to you how you choose to file. From a financial aid standpoint, your income would be separated from hers if you file a joint return. It is “easier” to figure things out when you file separately, but that’s up to you.</p>
<p>Is your wife the student? If so, and if you’re separated, how you file taxes makes no difference in filing FAFSA. If you file jointly, she would report her income and assets only on FAFSA, subtracting out yours from the joint AGI. If you both file seprately, it makes it easier for her to file FAFSA.</p>
<p>If you’re talking about your child, it doesn’t matter if you’re “legally” separated. The custodial parent is the one who would file FAFSA and it’s that parent’s income/assets that would be reported.</p>
<p>If you’re really separated, why would you file a joint return anyway? If you were married, you’d pay higher taxes if you file separately because you wouldn’t be eligible for many tax deductions and credits, and have higher tax rates. In general, it is more advantageous to file a joint return if you’re married. But it sounds like you’re on your way to being not married, so just file separately and make it easier on both of you for FAFSA.</p>
<p>Why don’t you both file head of household or single since you lived apart more than the last six months? This way you could both keep your incomes separate and get a better tax rate than if you file MFS. Also, when you file MFS you lose many benefits such as earned income credit and I believe the education credits along with being in a higher tax bracket.</p>
<p>For FAFSA purposes, it does NOT matter how you file your tax returns at all. BUT on the FAFSA, your child will ONLY list the custodial parent (the parent with whom the student resides the mose). The other parent is NOT listed on the FAFSA at all and neither are that non-custodial parent’s income or assets.</p>
<p>If your student is filing the Profile, the custodial parent’s info will be put on the Profile and the non-custodial parent will file a non-custodial parent Profile. Again…your tax filing status has NO bearing at all on the awarding of financial aid.</p>
<p>Filing status DOES matter in certain cases. That is, if a couple both files as head of household they MUST, MUST, MUST meet the criteria for being able to do so. BIG problem in my office … some tax preparers give very bad advice on filing status. If people file with an incorrect status, they will have to amend if they want aid. We are required to deny otherwise. IRS.gov has helpful information for filing status.</p>