<p>my wife's daughter is applying for financial aid soon. If she is not my dependent, and I earn substainlly more then my wife, would it be beneficial to file married but separate?</p>
<p>Who does your stepdaughter live with the most during the year?
Who provides the bulk of her financial support?
To clarify if the answer to above is your wife, it won’t matter if you file your taxes separately, as for Fafsa, your stepdaughter is your dependent.</p>
<p>How you file taxes, who claims her as a dependent etc. has nothing to do with filing for financial aid. If she is under 24, not married and a few other things, she will be required to report both your and your wife’ income and assets for financial aid.</p>
<p>FAFSA requires household income. If your stepdaughter’s father is the custodial parent, then your wife’s (and your) information would only be required for CSS profile. If your wife is the custodial parent, then she need to file FAFSA with full household information - that includes both you and your wife. Otherwise, families like yours would have an incentive for the custodial parent to stay home and not work, while the step parent supports the family.</p>
<p>If your stepD lives with you and your wife, then both incomes are used no matter what. For FAFSA purposes, she is a dependent of you and your wife…NO MATTER how you file your taxes. </p>
<p>Your income counts because your wife has access to more money because she’s married to you. Your wife’s income, by itself, is not supporting the household.</p>