<p>I just got accepted Early Decision into my dream. I need to fill out a form to estimate my financial need, but I'm more than confused. My parents own their own restaurant and don't speak much English, so they basically handed me their tax returns & left the room. I'm only stuck on one thing & would love some guidance!</p>
<p>"Estimate of 2012 federal taxes to be paid (not withheld)"
what taxes does that include? All the taxes on my parents' forms say "withheld."</p>
<p>Thank you in advance, & apologies if this is a stupid question.</p>
<p>I’m assuming they haven’t filed their 2012 taxes yet. The best way to estimate taxes they will actually pay would be to see how much they actually paid for 2011. Check their 2011 returns. If their 2012 income looks comparable to 2011, put down what they paid in taxes for 2011.</p>
<p>Taxes paid is line 55 of the 1040. Taxes withheld is line 62. People often incorrectly put the amount withheld in their paychecks by their employers … which many times is higher than what they paid (that is, they got a refund at the end of the year when they did their taxes & figures out that they owed less than they paid).</p>
<p>You had better get moving on this. You should have done this when you filed ED as you cannot know if your family can afford this school and you are locked into the contract. Your name and SSN will be released to other schools and you will be flushed from consideraton since you are in a binding ED contract. You have very little time to see if this school is going to meet your need. And if it’s CMU, though they will meet full need, you are going to have to come up with every penny of your family contribution because they will have a lot of work study and use your Stafford loans in their package.</p>
<p>@kelsmom Line 55 is a zero. Is that normal?</p>
<p>@cptofthehouse Yes, I know I should have done it sooner, & I take all the blame because it’s my fault But I never actually thought I would get accepted, & taxes honestly scare the eff out of me, so I procrastinated & now I’m suffering.</p>
<p>ALSO, ONE MORE QUESTION,
the form says, “As of today, what is the net worth of your parents’ current business &/or investment farm? Business value does not include the value of a small business if your family owns & controls more than 5o% of the business & the business has less than 1oo or fewer full-time equivalent employees. For small business value, your family includes 1 person directly related to you, such as a parent, sister or cousin, or 2 persons who are or were related to you by marriage, such as a spouse or sister-in-law.”</p>
<p>My parents own 1oo percent of the business & it’s just them & me working in it. What does “For small business value, your family includes…” exactly mean? What do I put for that?</p>
<p>(1) Your family’s restaurant qualifies as a small, family-owned business. Don’t worry about the different family members. Since your parents own the business themselves, that’s not relevant.</p>
<p>(2) I don’t understand the reference to line 55. Line 61 is total taxes owed, line 72 is taxes paid (prior to filing), and line 76 is taxes that were not yet paid (at the time of filing) and were still owed.</p>
<p>Who did your parents’ taxes for them? I’m guessing they didn’t do them themselves. Can you go to that person for some quick help?</p>
<h1>1.) So do I just put zero for the family business, then?</h1>
<h1>2.) The form specifically asked for taxes NOT withheld. The way I understand it, they don’t want taxes withheld. Regardless, lines 55 & 76 are both zero, so I guess my parents didn’t pay any taxes not already withheld?</h1>
<p>& I asked my mum if we could go to the tax lady, but she refuses to believe that this is important enough to require outside help.</p>
<p>I don’t understand the reference to line 55. Line 61 is total taxes owed, line 72 is taxes paid (prior to filing), and line 76 is taxes that were not yet paid (at the time of filing) and were still owed.</p>
<hr>
<p>Line 55 is the taxes owed amount that FAFSA uses — I realize it doesn’t seem right, but I assure you it is.</p>
<p>XGlass, if line 55 is 0, you put 0. It means your parents’ tax liability for the year is 0.</p>
<p>As I said earlier, “Estimate of 2012 federal taxes to be paid (not withheld)” means that you estimate what your parents’ total tax liability will be (which is line 55 for FAFSA), not the taxes withheld on the W-2’s. I could be wrong, since this is the school’s form, so just call on Monday and ask -ask them what line you would look at if you were using last year’s 1040 to estimate.</p>
<p>And yes, the value of the business should be reported as 0.</p>
<p>You do need both PROFILE and FAFSA, don’t you? Make sure you read the directions carefully as the rules are different from each other on those two forms.</p>
<p>(1) If what you quoted is accurate, then the answer would be yes . . . but I don’t have access to the form at the moment, so I’m taking your word for what it says.</p>
<p>(2) And I’m not sure about the taxes. (I’ve sent you a PM.)</p>
<p>(3) You don’t need to “go to” the tax lady - a phone call should be enough to straighten things out. She won’t be familiar with FAFSA (or CSS), but at least she’ll be able to tell you if your parents paid any taxes in 2011 or 2012, and if all the taxes were paid through withholding.</p>
<p>Line 55 is income taxes paid. Line 61 includes taxes that are not income taxes but which are collected via the 1040. FAFSA only wants income tax on this question. The OP doesn’t say whether the form they are filling out is profile or a school specific form. OP, is there a 1040 line reference in the instructions for the form you are filling out? If both 55 and 61 are zero, I would put zero but with this being a business, 61 may be non-zero in which case I would call as kelsmom suggests.</p>
<p>Yes, it is “owed,” or in other words, it is the total tax liability … whether it has been prepaid or has yet to be paid to the IRS. However, from the point of view of the FAFSA or a financial aid form, the taxes would be “paid” for the year in question.</p>
<p>XGlass, I expect the directions instruct you as to the line on the tax return to use. I know FAFSA does - I believe Profile does, as well. You need to simply put the amount on that line from 2011 if you are estimating using last year’s info. Don’t worry about why or whether the amount seems right … just put the number on that line on the form. THAT is the best and least confusing advice I can give you!!!</p>
<p>The fafsa SAR says ‘income tax paid’. If you owe but don’t intend to pay, (1) you are in trouble and (2) you can’t put the amount owed for this question, only what you paid or intend to pay.</p>
<p>FAFSA instructions tell you to put the amount from line 55 … whether or not you pay it is between you and the IRS. If you do a direct link to the IRS website after filing, the amount on line 55 will automatically dump into your FAFSA - even if you haven’t yet paid the piper (assuming you need to do so).</p>
<p>This is why I hate taxes, it’s so confusing!</p>
<p>I guess I should have made this clearer, I am not yet filling out the FAFSA or CSS. Right now, I am just filling out my school’s Estimated Financial Aid form. I can’t even contemplate how confusing those will be.</p>
<p>& the only time they ever make specific references to any lines is “estimated 2o12 parental tax-deferred compensation (Boxes 12a through 12d, coded D, E, F, G, H and S from W-2 Wage and Tax Statement[s] OR box 5 minus box 1.)”
Which is also, surprise-surprise, zero.</p>
<p>THANK YOU EVERYONE WHO HAS REPLIED.</p>
<p>From what I can gather, I think it’s best to put zero for both "estimate of 2o12 federal taxes to be paid (not withheld) & “net worth of your parent’s current business.”</p>
<p>It’s for an estimate only. CMU uses IDOC and they do verify actual tax returns before you see a dime, so the actual numbers will be what is used. You just want to get something in there, unless you truly need a certain amount commitment before you make your ED commitment. If so, they you have to be as close to what the tax numbers are going to be. Hopefully CMU meets full need for you as they DO NOT do so most of the time except for ED applicants who do as they are supposed to do during the times spans they give. Be aware that this is a school that does not tend to give a dime more than it has to and will let you walk away if you need more. If you NEED a certain amount of money, ED was really not the way to go for you.</p>
<p>As long as they don’t ask for more than my parents actually make in a year, then my parents assure me that they can afford it. We’ll just need to take out some loans & I’ll probably need to work full time during the summer. I know, I’ve heard the horror stories of fin aid there, & yeah, it is scary. But I wouldn’t have applied EDII if I wasn’t absolutely positively sure that I wanted to go.</p>
<p>It’s not whether you were or weren’t absolutely positively sure that you wanted to go that is of the issue. I’m sure you do. It’s whether or not you want to kick your parents in the teeth financially. One of my closeset friends is in financial ruins due to taking and cosigning loans for her daughter’s dream school. Can’t afford to pay it back and the DD isn’t making even enough to pay the interest on those loans. Credit is ruined.</p>
If you do a direct link to the IRS website after filing, the amount on line 55 will automatically dump into your FAFSA - even if you haven’t yet paid the piper (assuming you need to do so).</p>