<p>Okay. So, suffice to say that my wages last year were very low. My school wants me to provide them with a budget showing how I supported myself last year. In doing this, per my money claimed on my actual tax return, after rent, I would be left with $60 a month to pay for everything else.
My problem is that I am a tipped employee and never claimed my tipped wages. Also, I do, (albeit, not much) free-lance audio recording and guitar lessons, which also went unclaimed on my tax return.</p>
<p>I am short about $2500 total for the year. Is there anyway that I can prove to my school that I was supporting myself with these additional earnings if it was not claimed on my tax return (my tips, other work)?</p>
<p>P.S.
I live with my boyfriend and whenever I was ever short on money for bills, he would help me. I don’t know if telling my school about this would help or hurt my situation, as it would seemingly make me not independent.</p>
<p>The problem isn’t the school. The problem is your less-than-accurate tax return. Sounds like your school suspects the truth; namely, that you under-reported your income. I tried the same thing when I was your age and trust me, messing with the IRS always comes back to bite you one way or another. </p>
<p>I’d advise filing a corrected return including ALL of your income. Then you won’t have to invent stories to tell the school.</p>
<p>You cheated on your taxes and now you are trying to cheat the FA system. Fix the tax return, pay what you owe, and learn a lesson about honesty.</p>
<p>My guess is that when you tell your school about the unreported income they will ask that you amend your return (and FAFSA) to correct it. They certainly cannot distribute aid based on incorrect data!</p>
<p>Well, yes, your tax liability will increase, and you may need to pony up a tax payment. The IRS will usually work with you on payment arrangements if you can’t handle paying the increase right now. But if you’re asking “Will they throw me in jail?” – no, not for the kind of money we’re talking about. And it’s always better to confess than to get caught. ;)</p>
<p>I’d get it done right away. FAFSA is based on actual filed returns, and you’ll probably have to produce a copy of your return, W2s, and 1099s. sk8rmom is right, schools don’t just dole out money based on your say-so; they want independent verification that you need it. They KNOW at this point that you’re hiding income from them, what they don’t know is how much you’re hiding.</p>
<p>You can’t have it both ways. You need to correct your tax return ASAP…with the wages from tips reflected on your return.</p>
<p>You say you are trying to gain financial independence…and one thing you need to do is show your ability to support yourself. YOU NEED TO SHOW your accurate income…or you are scamming the financial aid system too.</p>
<p>You know…personally, I think you have huge issues with not reporting your tips to the IRS on your tax return. BUT you do realize that if you falsify information to gain financial aid, you risk losing not only your financial aid but also your admission to the school.</p>
<p>Is there interest applied for the unclaimed wages?
I don’t have a great job (see: tipped employee) - the most there was in unclaimed wages was $5000 total for the year. Any estimation of procurred taxes/fees/any interest I may have to pay as a single person with no exemptions?</p>
<p>You will be financially penalized for the unclaimed wages. Not only will you have to pay taxes on the past wages, but you’ll have to pay interest and a penalty.</p>
<p>Likely, they will also want to know about previous years where you didn’t claim your tips. And, did you receive any stimulus checks based on your reduced wages?</p>
<p>This will affect your state and federal taxes…</p>
<p>I did not receive any stimulus checks and I was given money back from the government after filing my original return.</p>
<p>The job I had for the year in mention was the only job I have had other than as an hourly waged employee in high school at a fast food restaurant for one summer.</p>
<p>I live in FL and do not pay state tax. My claimed wages as a delivery driver were less than $6,000 and the most I will be adjusting this to is $11,000. Will I still be heavily penalized/charged in light of this small amount? I am trying to get some kind of round-about estimation of just how much I will have to pay.</p>
<p>Also, thank you all so much for the information. Yes, I realize what I did was illegal and yes, I should have claimed by tips. Most of all, yes, I am young, inexperienced, and stupid. I am sure that any other tipped wage employees have been in, or at least understand in part, the situation. Suffice to say, lesson learned. Now, I just need to take the steps to render the situation correctly =/</p>
<p>I’m just wondering if after going to all the trouble and expense to correct this problem, if the school is still going to deny that you’re “independent”? Are you trying to become “independent” for F/A purposes? What kind of F/A would they give you? student loans?</p>
<p>I’m not trying to become independent for F/A purposes.
I am 23-years old and have been living in FL for the past four years attending school, earned a previous Bachelors at a school here, which did not acknowledge in-state/out-of-state tuition, and am now returning to receive another Bachelors here in FL.
(Yes, I know this is uncommon, but no regionally accredited schools recognize my Bachelor’s degree and I cannot enter a graduation program)
Both of my parents live in TX. Since I am under 24, they usually use the state of my parents residence to determine my residency.</p>
<p>I am not trying to scam a bunch of money out of the system. I have been living on my own the past three years as a poor, barely employed, 20-something who cannot get a job with their degree. I just want to be considered an in-state resident and to do that, my school needs me to prove my independency. Besides, I am not eligible for grants as I already have received a Bachelor’s degree. I really just need to be considered a resident. I am not so much concerned with the F/A aspect of it other than loans.</p>
<p>I agree, just go ahead and file a corrected return and a corrected FAFSA. Sounds to me like you still won’t have made enough money to have much effect, but there will probably be some. And, no, I don’t think you need to see a CPA. You can do this yourself, or if you really want some advice, a regular (non-CPA) tax-preparer can help you.</p>
<p>I agree with 'rentof2 not only to “prove” your independence, but if you do find that you need to file for financial aid. File an amended tax return, the different in what you claimed and what you should have claimed may not make that much difference in your taxes at your income level, but you will never know until you crunch the numbers. You should be able to do this yourself. Being able to “prove” financial history comes into play often as you move through life, for credit, for car loans, when you want to purchase a residence etc. so honesty is usually the best policy in the long run even if it’s cash tips, or freelance work.</p>