<p>Hello! I am a high school student who is applying to a lot of US schools, I have been in the states practically all my life. However, my family is in a really weird situation over the income thing. My dad lives and works out of the country and makes the majority of our income, my mother works part-time in the states. When I look at our tax forms, none of my father's income is taxable (because it is in another country), only my mother's income is taxable so our tax returns look kind of ridiculous. My question is that what am I supposed to write down for financial aid forms for colleges? FASFA? Total gross income? It is all very confusing.</p>
<p>Is your dad a U.S. citizen? If so, he probably needs to file taxes even if he resides and works elsewhere.</p>
<p>You have to include your dad’s income even if he doesn’t pay taxes on it. You would include both your dad’s and mom’s incomes on the financial aid forms.</p>
<p>He is not a US citizen, instead, he has a green card. My mother, on the other hand, is a United States citizen as well as I. Do we just give an estimate of his earnings overseas?</p>
<p>I believe that your dad’s income should have been included in US tax returns and he should have been paying taxes in US, but he also should be given credit for foreign taxes he paid.</p>
<p>I would recommend your family consult a tax accountant about this.</p>
<p>So your dad has a green card - and gets all the benefits of U.S. residency - but doesn’t pay taxes?</p>
<p>From [Nolo.com](<a href=“http://www.nolo.com/legal-encyclopedia/visa-green-card-holder-pay-taxes-29639.html]Nolo.com[/url]:”>When Visa or Green Card Holders Must Pay Taxes | Nolo):</a></p>
<p>“Once you get a green card, you automatically become a U.S. tax resident and you must declare your entire income to the U.S. government.”</p>
<p>The good news is that he’s just in time to file a tax return for 2012 - and that’s all he needs to do in order for you to file your financial aid applications. Yes, he will eventually have to take care of all those years that he didn’t file a U.S. tax return, and was supposed to . . . but, in order for you to apply for financial aid, the only tax year that’s of immediate importance is 2012. So, it’s time for dad to file his first U.S. tax return!</p>
<p>Of course, if Dad works for the World Bank or a similar international entity, that changes things . . . and, in that case, it’s possible his income is not subject to U.S. income tax. (In that case, I’m guessing it would be declared on FA forms as nontaxable income.)</p>
<p>Even if your dad works for world bank, or something similar, his income is still required on the financial aid application forms.</p>
<p>Whether your father has paid taxes or filed a form, the financial aid form require all income and assets to be listed. The problem comes with that question about the tax status. If you put down that he does not have file, there is most certainly going to be some questions that come back about this. If he indeed does not have to file, no big deal. You just answer the questions. But if he does… I don’t know what the consequecnes would be.</p>
<p>The other answer to all of this is if your parents are physically separated since he lives elsewhere and you live with our mother, you can so apply on the FAFSA and his income won’t be needed other than the payments he sends to your mother.</p>
<p>If your father is required to file a 2012 tax return and does not do so, I’m not sure you can receive federally funded need based aid.</p>
<p>Thanks for the replies all!</p>
<p>To add:
My father did file his taxes jointly with my mother. He did do some odd contract jobs in the US and filed taxes for this small amount of income. He is definitely filing federal taxes (1040 form), but is not including his overseas income for this to be taxed since he pays the tax for the country in which he resides.</p>
<p>He should have somebody qualified do his income tax return. His overseas income is reportable although maybe not taxable to the U.S. if he doesn’t live here. But it MUST be reported. He will either get a credit for the taxes he pays to the other country, or excludable if he spends most of his time overseas, although he can’t claim bona fide residence of the other country and keep his green card. Have him see a professional.</p>
<p>He needs to file the foreign income paperwork using the “physical presence” status for the time periods in which he is outside the country. </p>
<p>My heart goes out to you and your family. Filing the paperwork for your dad’s tax situation is a nightmare. I did it for eight tax years, and was so glad when we no longer had any foreign income. Good luck with everything!</p>
<p>As I said before, the foreign income of green card residents is both reportable and taxable, although you get credit for foreign tax paid.</p>
<p>3bm103 is right, you should have reputable accountant doing your parents taxes. For example, your father should also be reporting value of his foreign bank accounts. Basically your parents need to hire someone who knows this kind of stuff, so that they can avoid troubles with IRS. Especially if your dad ever comes wants to come back to US.</p>