Help me with FAFSA & CSS PROFILE, please

Paying for College
1

I’m expat abroad in SE Asia.

First question, my non custodial parent gave money to my mom’s bank account for me in 2018. Where should this be reported in FAFSA and in CSS PROFILE?

Second question, in 2018, I had a $10,000 medical bill which was paid by my friend’s uncle. How should I and where should I Report this on both the FAFSA and CSS PROFILE?

Third question, my grandpa gets a pension every month which he writes a check and I deposit it in my account to run the household, since he considered me as being quite conservative in spending habits. Dad lives with us and earns nothing. So that pension from grandpa is used for all 3 of us for food, etc and also for electricity, etc.? How should I Report this on the FAFSA and CSS? The amount reaches my account every month but all 3 of us spend in unequal ratios.

Fourth question, an unclaimed money was just claimed by my dad from a US state where he lived 20 years ago. The check has been sent to us but not received by him yet so he doesn’t have that money yet and it won’t be there in time for these forms. Where should I Report this money, if at all to be reported on the FAFSA and CSS? Dad isn’t a US citizen.

Nov. 15 is deadline.

2

@kelsmom can probably answer most of your questions. I’m not sure you have to enter the money from your grandfather unless it’s being used to pay bills in your name.

I don’t understand your first question. It sounds like you live with your dad. We’re you living with your mom in 2018 when child support was put in her account?

3

Which parent do you live with? The above question makes it sound like you live with your mother, but in question 3 below you say that your dad lives with you.

On FAFSA, this would be reported in 44.i., Money received, or paid on your behalf (e.g., bills), not reported elsewhere on this form.

Whether or not the money from grandpa that is sitting in your account should be reported on FAFSA as your asset is debatable. I also think it’s an open question as to whether or not grandpa’s money that is given to you (i.e. not directly paying a bill that is not in your name) should be reported on FAFSA as untaxed income to you.

Money that your father is expecting but does not yet have control over or cannot now be used for his benefit should not be reported on FAFSA as his asset.

4

@BelknapPoint , I’m sorry, it should’ve been ‘dad’s bank account’. I live only with my dad.

So I got my first question solved. @BelknapPoint you gave an advice above for 4th question. So I’m cleared that it shouldn’t be on the FAFSA but somewhere on the PROFILE I saw - ‘Money that your parents have abroad’. Could you please help me out with this one?

Also you told me that question 3’s answer is an open one. I’ve to add one more thing, none of the bills except my carrier plan bill (every month) are in my name. All of the bills like property tax, electricity, maintenance,etc. are either in grandpa’s or dad’s names. My job is to just deposit his money in my account and help the family spend it over a span of 1 month. Then it’s over and next month comes another check. Also this source of income is not reliable since grandpa may not be with us forever.

How should I get question 1, 2, 4 & 5 (below) solved? @kelsmom please help me.

5

Also, I’ve another question-

Fifth question, in 2019 when my grandpa fell ill, we received money either in form of hard cash or electronic transfer to dad’s account from -

  1. Dad’s ex (mom) - electronic transfer
  2. Friends - hard cash and electronic transfer

This money was used to treat grandpa. So I should I list this money on both FAFSA and CSS PROFILE, if so where? It shouldn’t be an untaxed income for dad, right?

Just to keep track of your answers and be clear, I request all posters to please begin your answers mentioning the question number to which it refers to. (Original post and post #4)

6

Sixth question, @BelknapPoint ,could you please tell me what is that particular money limit as untaxed income to a student? Is it somewhere between $6k-7k??? And anything above will be charged 50% to me in aid award? Then if I list $10k as untaxed income, maybe $1500 will be charged to me as the amount I can pay for college?

But in reality, I don’t have that money nor received it. It was paid by the uncle. Can I explain this to colleges? How can they charge me an amount that I don’t and won’t have?

7

Seventh question, did I owe taxes for the untaxable income @BelknapPoint said of $10k med bills? I’m starting to freak out. I used the IRS tool to confirm whether I had to file or not and it said -“ You are not required to file a tax return for 2018
You are not required to file a tax return because your income does not equal or exceed $12,000, nor do you owe any special taxes or have any special situations that require you to file.”

Is it true? Or am I unknowingly owing taxes? @kelsmom, please help me on this one too.

8

Eighth question, my dad has work only SSN, can he still create FSA ID? Or sign on printed form and snail mail to whom?

Ninth question, what is meant by ‘Electronic Signature in FAFSA’? Should I just type in my full name or what?

Track:
Questions solved so far=1 (Q3, original post)
Questions unsolved so far=8 (Original post Q1-2,Q4, post #4, #5, #6, #7)

9

Don’t mix up income with gifts. It sounds like most of this isn’t income to you but support of your father or grandfather or child support paid by your mother. If someone gives you $5 because you walked the dog, that’s income. If they give you $5 because they like you, that is a gift and not income. If that $5 is in your bank account on the day you file your FAFSA, it is an asset.

10

@twoinanddone , could you please help me fill out the FAFSA and CSS PROFILE? I’m very new to the US and very confused with all these definitions.

If someone gives you $5 because you walked the dog, that’s income. = I don’t have that kind of income to report.

If they give you $5 because they like you, that is a gift and not income. = My grandpa doesn’t give to me because he likes me but thinks I can run the household much better, pay bills (on their name) on time and spend more conservatively. What is this?

Don’t mix up income with gifts. It sounds like most of this isn’t income to you but support of your father or grandfather or child support paid by your mother. = Where, what and how to report the information then?

11

Your custodial parent is your father because you live with him. It’s his income that goes on FAFSA. Money that can be attributable as “gifts” to him are not considered income. Anything that you can attribute as going to him as a gift that is then used to run the household should not be reported as income. If your mother clearly has it recorded and indicated that the $10k she gave your father in 2018 was child support, then it has to be listed as such. If it’s just a gift to him or shows as such, then that’s a gift.

Income for FAFSA purposes and financial aid are totally different things. However, monetary gifts to your father are treated pretty much the same; the IRS does not charge taxes on monetary gifts, and FAFSA does not expect a parent to report monetary gifts either.

12

Your custodial parent is your father because you live with him. It’s his income that goes on FAFSA. Money that can be attributable as “gifts” to him are not considered income. Anything that you can attribute as going to him as a gift that is then used to run the household should not be reported as income. If your mother clearly has it recorded and indicated that the $10k she gave your father in 2018 was child support, then it has to be listed as such. If it’s just a gift to him or shows as such, then that’s a gift.

Income for FAFSA purposes and financial aid are totally different things. However, monetary gifts to your father are treated pretty much the same; he is not supposed to report monetary gifts to The IRS as it does not charge taxes on monetary gifts, and FAFSA does not expect a parent to report monetary gifts either as untaxed income.

You do not report assets on the FAFSA unless the money is actually In your account or in hand the actual date you submit the FAFSA. In fact, it’s advisable to pick the date you press the send button to be a day AFTER expenses have been paid for the month and not the day you are sitting flush in assets with payables. A check in the mail may not arrive for any number of reasons.

YOU, the student, are supposed to report as untaxed income, any money you are given in gifts, tips, as well as any bills paid on your behalf by anyone other than your father. It’s called untaxed income because most of the time you will not owe taxes on it, it doesn’t show up on your tax return. As said earlier, income to the IRS and FAFSA do not necessarily jive. You do not have to report gift money to the IRS any more than your father does. However, FAFSA requests this information. Any money given directly to you or on your behalf is supposed to be reported as untaxed income to you. If your non custodial parent (mother) gave your custodial parent(father) money for you, that is considered child support or untaxed income to you. It can come down to how that money is reported.

On a pragmatic basis, most kids do not report small gifts, even money on FAFSA. Actually, $5 given to you for walking the dog or as a gift, it does not matter, is supposed to be reported on FAFSA as student income. But as a matter of practice, most kids do not even track small gift amounts of cash. I doubt birthday, graduation, holiday gifts are reported as untaxed income to them by students on FAFSA as technically they are supposed to be. It’s a gray area that is not pursued, though if there is a paper trail that is there if you are selected for verification of this sort and scrutinized, and you deposited money into your bank account, for example, it is possible it can come up.

The $10k in medical bills paid on your behalf by someone is an issue. That is supposed to be reported on FAFSA—not to IRS, they do not care about monetary gifts, or “on behalf” payments of this sort. FAFSA does ask for this and that could be a very heavy hit in your EFC, as half of any amount you receive as income over $6660 is added to your EFC.
Note that the parents’ untaxed income section does not include a question for “money received, or paid on your behalf” while the student’s untaxed income section does.

13

I disagree. A gift is not income. Working for the money (walking dog) is income. I used $5 as an example. It could be $500.

I agree most kids do not report minor income like babysitting or a small tip, but it is supposed to be reported as income. All those $5 (or more likely $25) jobs can add up. Most do not report gifts even if they still have the cash or a gift card in their pockets, but it is an asset on filing day. A gift is not income, for the IRS or FAFSA

You are overthinking this. Your father makes $0. If the $10k received from you mother was for child support, report it. If it was for support of your father and grandfather, don’t report it (it’s not income)

If your grandfather is paying to support you all (all live together) that’s fine. Colleges will ask how you are supporting yourself if you report $0 income. At that time you can say you live with relatives.

We don’t know what money your father will receive is, so don’t know how to report. It could be a pension, so income (when received) or a forgotten utilities deposit (an asset when received), or a gift, or an inheritance. We don’t know.

Don’t have your grandfather’s money in your account on filing day or it will be hard to prove it is not your asset.

14

Technically, a cash gift received by the student during the reporting year (i.e. received in 2018 and completing the 2020-2021 FAFSA) may need to be reported on FAFSA as “untaxed income” (FAFSA’s language, not mine).

15

A gift is not income to the IRS. It IS income, specifically “untaxed income” to the STUDENTS on FAFSA. But not to the parent.

Thanks for pointing that out, @BelknapPoint I left it confusing and incorrect there.