<p>So my parent inherited $200,000 in 2009, which we had to put as "untaxed income." But we used this money (literally, almost all) to pay off medical bills and debt. Will having it in "untaxed income" raise EFC? I know in the estimation calculator it definitely does (by a TON, even though our actual income is $19,000 and I have another sibling in college), but will colleges look at the fact that we no longer have the money in savings? I just did the EFC calculator and it scared me. Thanks all. </p>
<p>(P.S. Posted this is Questbridge forum a while ago but only got one response. You guys always know so much anyway. Thanks for your time)</p>
<p>If you no longer have any of it, I think you’re OK. If you’re a senior applying, your aid will be based on 2010 income and current assets. If the money was used to pay down a mortgage, creating home equity, that could come into play at Profile schools as would any assets you bought with it. But if you paid credit card bills and medical bills and the money is just gone, they can’t ask for any of it.</p>
<p>For 2009, I think the profile only asks for income reported on your federal tax return. I’m not a tax expert, but usually the inheritance taxes are paid on an inheritance before you receive it, so it doesn’t show up on your tax return. As noted above, the details of assets and unearned income will be asked only for 2010.</p>
<p>So we thought that it included all untaxed income (since it doesn’t seem to say anything about untaxed income on tax forms. My parents say that it doesn’t show on taxes)…</p>
<p>So I guess what I’m asking is… will inheritance be treated as income, as it is in EFC Calculators. Or will they see our note about it being inheritance, go to assets, and dimiss it? Thanks again. It’s just those EFC Calculators which put my EFC at tens of thousands when my family makes 19K a year.</p>
<p>The FAFSA that you will file on or after January 2011 will be based on your family income for 2010 and your assets as of the date of filing. If the money received in 2009 has all been spent, or put into retirement accounts, or used to pay down a mortgage on your family home, FAFSA won’t see one cent of it. When you run the calculators, it is important for you to remember that you are estimating what your situation will be like as of the date when you will file the FAFSA. </p>
<p>If QB asks for your figures for 2009, you need to let them know that this inheritance was a one-time thing, and that the money was used for X, Y, and Z and for that reason is no longer available for your education.</p>
<p>It will only affect Profile. You should contact each Profile school to discuss the situation. I would expect that if they are going to consider that as available income, they would request documentation of where the money went in order to give special consideration. If it paid off medical bills, that is most likely relatively easy to document. How each Profile school uses 2009 untaxed income in its own formula is hard to say, so it really is worthwhile to discuss your situation with an aid advisor at each school that uses Profile.</p>
<p>Also, isnt 2009 used only for estimate purposes. I believe, that if accepted, you would get an estimated financial aid award, with the condition that if 2010 changes substantially, then so would the aid. I think this is the situation. If that is indeed the case, you should explain your situation to the schools you applied to and let them know all your current 2010 income situation to date, by that I mean taxable and untaxable income, along with interest income to prove you no longer have the inheritance money in the bank. </p>
<p>The PROFILE takes into account all the sources of income and assets used in the FAFSA, and asks for additional information such as the value of home equity, parental funds in the name of siblings, and amounts withheld from wages for medical spending accounts. These additions generally increase the expected family contribution in those cases where they apply. On the other side of the ledger, however, the PROFILE calculations consider some of a familys expenses such as medical and dental costs and private school tuition. </p>
<p>It is understood that each financial aid year stands on its own and if there is significant change in income (either up or down) then the award could change.</p>
<p>Call and talk to the financial aid office at your schools… Just get the name of the person you talk to.</p>
<p>I did describe the situation in the Profile Notes, is that enough? Should I call them anyway, even if I would simply be explaining what I already noted??? Thanks again</p>
<p>Since you already explained it, I would suggest you call the financial aid offices and ask if they would like additional documentation of how that money was spent (bills, receipts, statements, etc.) They may say no, that once a finanical aid award has been worked out, if you need to then appeal, that would be the time for the additional documentation. However, if it helps them make a realistic determination in the first place, that may be helpful.</p>
<p>On the other hand, they may not be looking at that element of the CSS Profile much anyway. Just because the Profile asks certain questions, doesn’t mean all schools use all the information, or treat all that information the same way. Id just give a call to the schools’ FA offices and ask them if it would be helpful for you to send them additional documentation at this point.</p>