My dad doesn’t file taxes, because he get’s his taxes withheld through his job (so there is no penalty for not filing, since he would instead get a refund). He made $10,000 in year that the fafsa is asking about, which I think is above the amount needed to file taxes. However, his job takes out about 25-27% of his paycheck for income tax (federal, state and local combined), so he does not owe taxes to the government (there are personal reasons for him not wanting to file for a refund either). However, since there is no option to relay this on the fafsa, I wanted to know if they would deny me financial aid, since he did not file? NOTE: The only people in my household are me and my father, and I am only a dependent to my father.
If he is not legally required to file per IRS rules, that is okay. But I’m not sure that is true given the info you’ve provided. Just because they withhold the amount you owe or more via payroll taxes does not exempt you from filing.
Your father will have to provide either the an IRS transcript or a letter of non-filing from the IRS.
Your not supplying this can cause your federal aid to be withheld.
It is very possible at that income that your father may not have been required to file a tax return (although if he did so, he may get a refund of taxes paid …). If he is not required to file, he does not need to file in order for you to get financial aid. IF you are selected for verification of income, your father would be required to provide an IRS non-filing letter along with copies of his W-2.
Not enough information.
Most people who earn $10,000 in a year are REQUIRED to file a tax return. It doesn’t mean they are going to owe any additional tax money to the IRS, but they have to file.
@BelknapPoint what is the threshold income for having to file a tax return as an employee? Isn’t it in the $6200 a year range?
2017 minimum is $10,400 for a single filer under age 65 (head of household was $13,400).
If he had a tax liability (in other words, he owed taxes with an income for the year of $10,000), he should have filed a tax return, even if the money withheld by the employer covered the amount owed. If he didn’t have a tax liability, he should have filed anyway to get a full refund of the amount of money that was withheld and sent to the IRS. So, no matter what his tax situation was, he should have filed a tax return.
If you are right about his income, and it is all wages, then he is not required to file. However, he is leaving a substantial amount of money on the table. If he’s not filing because he owes back taxes, child support, or any other things that would be taken from his refund, it’s still in his best interest to file and maximize his refund. If we assume they’re taking it for back taxes, and he’s having $2000 withheld, the IRS will eventually get around to calculating his refund in the least favorable manner, and might credit that $2000 when they do. If he files a tax return, they will credit it when he files it. If you are his dependent, he may also be eligible for child tax credit (another $1000) any Earned Income Credit (possibly another $3000).
If he doesn’t file, you mark the spot on the FAFSA accordingly. You will probably be required to provide copies of his W2 to each school, as a form of verification. He can still file 2015 - 2017 returns to get those refunds, so that could potentially be $12000 to pay off those debts! Please encourage him to look into this, and to be honest with you if he’s allowing someone else to claim you as a dependent, because that could cause problems for you now that you’re applying for financial aid.
I don’t believe it matters one bit who is claiming this student as a dependent on their tax return as it relates to student financial aid.
If this parent was not required to file a tax return, he will need to request a non-filers statement from the IRS. The student would indicate “will not file” on the FAFSA, but will need to provide the non-filers statement which will document why this was OK.
BUT…if the parent WAS required to file a return, this will need to be done.
He should file, so that he can get earned income credits and other credits. It is not wise for him to have that much withholding, and give Uncle Sam an interest free loan. He should update his W4 form to lower the withholding.
I do feel there might be something else you are not telling us?
How are y’all living on $7500 per year??? How much is your rent? Does your dad have a car? What do you do about food, clothing, electricity, etc??
What are the personal reasons?
Someone else claiming him won’t directly impact the financial aid, but if he qualifies for federal grants, or work study, it’s likely to IRS will do some cross checking, and will be alerted to the situation, particularly if that person claims to be a custodial parent for EITC purposes (we see it every year in our tax office - and refuse to file the fraudulent returns).
I suspect it’s not that the OP isn’t telling us something - it’s his father that isn’t being honest with him. If his W4 on file with his employer is filled correctly, there shouldn’t be any withholding, other than employment taxes. I would encourage them to visit a tax professional, and ask for advice - often basic advice, such as whether he really needs to file or not, will be given at no charge. If the father is using someone else’s SSN (I’ve had clients who didn’t know they themselves were undocumented, let alone their parents, until time to apply for college) it will be impossible to obtain a non-filer’s statement. I wouldn’t expect the OP to share the situation here, but he needs to find out what he’s dealing with, so he can have reasonable expectations regarding financial aid.
No I mean that my dad gets his money withheld by his job, like you know when you work a wage payroll job, they take out taxes for you.
Our rent is reduced where we live. In my town, they offer cheap housing for poor people. I also work while I wass in high school and throughout college and make roughly the same amount as him.
The personal reasons aren’t for anything like him not trying to pay taxes, I see his W-2 every time they come to the house. One of the reasons is because he’s legit just too lazy too. When I was in high school, I was honestly too lazy to get my refund too, until two years later, because I knew there was no penalty. A couple years ago he filed and would always give his daughters some of the refund as an allowance, but since we don’t live with him anymore, he doesn’t feel the need. The other reason is because he wants to file three years at one time, which is what he used to do before, so he can get more money back at one time. Another reason is also out of fear. When I was younger, two men came in and robbed my parents house, because it was “income tax season.” I of course didn’t live in the best neighborhood at the time, and people would take the opportunity to steal or “borrow” money from you (old relatives pretending that they’re sick, etc). My dad group up in a pretty bad part of Philly, so he tends to get scared of things like that a lot, so he would get the refund at an odd time of the year.
I didn’t realize that people would assume that personal reasons meant something bad, so I didn’t think it was necessary to include. I guess I should’ve just rephrased my question, asking if my dad chose not to get his refund yet, at the time of the fafsa, then how do I relay that to them?
Also, if you are due a refund you technically don’t have to file, at least there is no penalty. The penalty is taken as a percent of how much you owe, and if you owe nothing, zero times zero is still zero. He doesn’t have to file. Another thing to note is that you have 3 years that you can wait to file if you’re getting a refund, you don’t have the regular deadline.
How much is your monthly rent? How much are your utility bills? Do you have internet?
Something doesn’t sound right. Why won’t your dad file taxes to get the money back? Is he using a fake name at his employer? Is he an undocumented worker?
Where is your mother?
You work throughout college?
Sorry for the multiple supplies. I would also like to bring up that my dad doesn’t owe child support or anything like that (I’m not sure what all else your supposed to give to the child’s other parent). I only have one living parent and I’m my father’s only living daughter - my mother and sister are both deceased - so there’s nothing owed to other family members.
There are programs to help you pay for rent and reduce it (you can get your rent reduced to $200 a month). My mother is deceased, and I work while going to school to help him and to pay for the rest of school. You know there are many people in the same situation as me right? Many people make less than $15,000 a year.
I’m very sorry to hear about the deaths of your mom and sister.
Some of your story just doesn’t make sense. Why wouldn’t your dad file his taxes so that he could get his federal and maybe his state taxes back.