<p>I wasn't thinking this far ahead back in 2010 when the IRS offered the opportunity to convert traditional IRAs to Roth, but hold off claiming the income and paying the tax until 2011 and 2012. Now that conversion is inflating my income for 2012. Since this money was actually earned many years ago and over the course of several years, is there any place on the FAFSA form that I can actually back that out of my Adjusted Gross Income for 2012?</p>
<p>You did not originally pay tax on the traditional IRA… so for the conversion you must pay it now ( 2011 & 2012) @ ordinary inc. tax rates. I dont see how you can back that out.
But be glad it’s this year… next year your Bracket may be higher. Yet to be determined by Washington DC. To answer your question tho~ there may be a place on FAFSA to explain extraordinary income for one time events?</p>
<p>There is no place on FAFSA to account for this. However it is something a school can make a professional adjustment for. You will need to contact the school and ask them. Any professional judgment adjustments are at their discretion, but it is something you can ask them for.</p>
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<p>Dear Colleague Letter GEN-99-10 see [FinAid</a> | Professional Judgment | Dear Colleague Letter GEN-99-10](<a href=“http://www.finaid.org/educators/pj/gen-99-10.phtml]FinAid”>http://www.finaid.org/educators/pj/gen-99-10.phtml)</p>