<p>I know I've read elsewhere (here) that you should include, as part of the 'reportable investments' section of the FASFA, the amount deducted from salary for retirement (for whole past year). But, then in FASFA it says 401k is not to be included. And, when we reported gross income, that 'deducted part' was included in the gross income.</p>
<p>Not sure if I should include the $15k that was deducted from hub's salary over the past year? That seems like a big chunk of change & I didn't want to go the wrong way on putting it down incorrectly.</p>
<p>I'm not looking at the FAFSA now, but I don't remember reporting gross income. I think the income you report is net of 401K contributions, so that's why they ask about it.</p>
<p>If the retirement money was put into a tax-defered IRA the amount will not be included in your gross income, and you will have to report the money you put in, as that is technically money that was available. </p>
<p>If you put your retirement money into a Roth, that money is already in your gross income and there is no need to report it elsewhere.</p>
<p>You are correct, that you do not need to report the current "value" of your IRA accounts on the FASFA</p>
<p>Um...under parent information (maybe the 4th page of the online version) it asks for adjusted gross income. Am I completely misunderstanding this? Because, when I looked at our 1040 from last year, there was not $15k taken out of GROSS income to come to AGI ($15k is the amount my husband had deducted from his salary to go into 401k). Maybe I have something wrong...or, was the tax-preparer supposed to deduct the $15k from the gross to get to AGI? Why didn't I retain anything from my tax classes...</p>
<p>Edit--just saw your post, jjcddg. Guess I understand. The tax preparer never put the $15k 401k contributions into the gross to start with (I guess) so that's why we report it as investment income. Ok. Thanks!</p>
<p>401k contributions are pre-tax, so they are not included in your AGI. This is on purpose; the government intends for 401k contributions to reduce your taxable income.</p>
<p>However, pre-tax retirement contributions are still on your 1040, and FAFSA wants to know about them. You report on FAFSA the total of lines 28 + 32 from your 1040 or line 17 from your 1040A.</p>
<p>and, of course, that 401k contribution is considered disposable income so it is added back to AGI when fafsa and profile calculate the your EFC.</p>
<p>vballmom---um...maybe I'm looking at the wrong thing...I looked at lines 28 & 32 on the 1040 (Self-employed SEP, qualified plans and IRA deduction) -- and our 2007 form had zero for both. Okay...hub contributed $15k to his 401k plan...not to try to get free advice, but did our tax preparer do something wrong? Tax preparer is someone I have serious, ethical reservations about (not my choice for a preparer!) so wondering about that. She offered to fill out the FASFA for me...but I think I'm better stumbling along on my own, clueless as I might be....</p>
<p>Jolynne I wouldn't necessarily assume your tax preparer did anything wrong. It's possible that 401k payments don't appear on line 28 of the 1040. The reason I responded to your post is because I'd just been looking into a similar situation with my taxes, where my company's SEP-IRA contribution (I'm self-employed) did not appear on line 28 of my 2007 taxes either. And I have <em>zero</em> ethical reservations about my CPA - he's as no-nonsense, by-the-book as they come. But the FAFSA instructions clearly state you need to add lines 28 and 32 to fill in the retirement contributions for 2008.</p>
<p>My CPA is currently working on my corporate taxes for 2008 and hasn't gotten to my personal ones, so I haven't had a chance to ask him about this yet. But when I do, I'll post what he says. Unfortunately, he knows nothing about financial aid.</p>
<p>Jolynne: your 401-K contributions don't appear on any of those lines on your 1040 because line 7 of your tax return that asks for wages, is already reduced by the amount contributed to your 401-K. You can check this by seeing if your gross wages on your W-2 are different that your medicare wages by the amount of your 401-K contributions.</p>