Yes, I forgot that any income payment will have the SS number of the payee associated with it.
It normally doesn’t take long if you do it online.
Did you google your state and 529 plan?
Just get it in there before the day you submit your FAFSA.
Plan for costs you need to pay soon, such as textbooks and room and board - for spring semester. You could pay those and then put most of the rest in the 529.
Does your parent know about claiming the up to $2500 American Opportunity Tax Credit on up to $4000 of tuition/fees/books paid for in 2015?
If all of your 2015 tuition/fees/books were paid for with grants and scholarships, you could make up to $4000 of them taxable on your own return so that your parent could get up to a $2500 tax credit.
See IRS Publication 970.
(Applies to the parent who claims you on his or her tax return).
I doubt my mom knows about that, but it sounds really good if we qualify for that. I will definitely look into that, thanks!
Have you gotten your spring bill yet? If so, has all your aid been applied? Usually, some aid won’t disburse till January/right before school starts. If that’s the case, you should have an outstanding balance on your student account/be able to “pay” the bill. Then you’ll have $0 on bank. File the FAFSA on January 1st or before your aid kicks in. Then when your aid is applied, you’ll get a refund/your $ back.
Not an expert on SS, but my son did receive benefits while he was in high school 6-9 years ago. I was required to open a bank account in his name so the check could be directly deposited. The money had to be used for his expense so–food, clothing, etc. When we talked to the SS when my h was retiring, my son’s benefits were a surprise to us. I mentioned that I thought we would put the money into an account for his education and was told that that was not an allowable use of his money. Each year that he received benefits, I had to sign a statement telling how the money was used and that no money was left at the end of the year. I am not sure how this is enforceable but I didn’t want to mess with SS, so we used his money for food, etc., and set up his education account from “other” money.
My son did not qualify for financial aid so I don’t know how the benefit is reported on FASFA. I would think that the payments would have to be recorded whether you physically still hold the money or not.
http://finance.zacks.com/childrens-social-security-benefits-accounted-annually-9664.html
@lotsofquests, sounds like the use of that form refers to representative payees, if the child is under 18. To make sure the money is used for the child or saved until child is 18. But OP was 18 and got the benefit until he graduated high school I think.
@Kaponator, you said you had work income last year, was your EFC 0?
Other SS employees have said it is fine to not spend it and instead save it for college.
Is the bank account where you have your 9K a true independent bank account or some form of a dependent account that is subordinate to your parent’s bank account (like HS Checking or College Checking offered by some banks)? If it is the latter then the money still technically belong to your parent.
are you sure all $9000 will be used to calcuate EFC? I was in a seminar, I didn’t pay attention, but I have the impression that the first $6000 (or so) is exempted from the calculation
^ No, you’re confusing income with assets. Dependent students have zero asset protection.
It doesn’t matter where the money is; the SS benefit is paid to the child and must be used for the benefit of the child.
You don’t have to live in the state necessarily to use their 529 plan. Virginia has an excellent one.
I haven’t read the whole thread, so forgive me if this has been stated many times. The SS benefit is yours but is paid to your family. If any of that money is used towards your upkeep while you live at home (food, shelter, clothing etc.) the SSA will allow for the parent to deduct that amount of money and not place it in an account in your name. In recent years the SSA has approved 529’s as an acceptable investment for dependent children. Your father will be sent a form a year or so from now and will be asked to state how much of the “child’s” money was used towards their upkeep and how much was put aside in an account. Honestly, the $1050 child benefit would barely cover a kids food and shelter if the family is destitute. It is your fathers “right” to use all or some of the money for your “upkeep”. Anything else needs to be put in an account in your name.
@BelknapPoint The money is always considered by the SSA to be the parents and it is the parent’s discretion as to how that money is used. The SSA doesn’t track which account the money is paid into, but the IRS will. @Kaponator a 529 is your best bet right now and you can set it up very quickly. I think it’s in your best interest to get it into a 529 before Jan 1… @Madison85 is correct in my opinion. @CCDD14 is on to something. **** This is something I’ve been dealing with for years so I feel like I’m an “expert” even if I’m relatively new here!!
^I disagree that the SS paid to a child because the parent is retired and receiving SS, is “always considered to be the parent’s”. It is not on a 1099-SSA issued to the parent.
If it was paid to parent why would they need his soc sec #? From what I understand he was 18 when he started getting the benefit, only got it until he graduated from high school.
I would think that money paid to a child over 18 is that child’s. Probably different if the recipient is under 18, then it would bw held by the parent in a fiduciary capacity, and have to be spent for the child. But if it is the child’s own money, there are no restrictions on what s/he can spend it on or do with it.
If that is correct, then these benefits would be income to the child. On the other hand, if the checks were made out to the parent, NOT “for the benefit of” the child (or other similar language indicating a trust or fiduciary capacity), then it would be income to the parent. You will know for sure when you see the SSN on the 1099. Either way, it should be reported as income of one or the other on FA forms. Can’t get around that. It is income to someone, and the tax rules will dictate who reports it on their tax return.
Now if it was income of dad, and dad gave it to OP, then as a gift it would be reportable as untaxed income of the OP. However, if OP never spent any of it, s/he could possibly return it to dad and say that the transfer was a mistake, or that s/he never “accepted” the gift. Can’t do that if OP spent any of the money, though. Of course then it’s dad’s money, no strings attached.
If it was income to OP originally, there is nothing stopping OP from GIVING it to dad. OP would report it as income, but not as an asset, if it is given away before FAFSA is filed. There is no penalty for giving away assets prior to filing FAFSA, like there is when planning for Medicaid to pay for nursing home care. There can’t be any plan to give back, of course, or it is not a real gift, but I thought the OP was asking about a true gift to dad.
therefore is the SS considered as a child’s income? isn’t it true that parent does not have to report tax on the child’s SS, therefore even if OP did not keep the 9000 in a bank account, it will be considered as income (with the exception of the $6000) and be required to contribute as EFC ?? is it correct?
Who will be receiving the 1098 or whatever form? That is the person who has this as income.