Very helpful again. But do we have to amend OUR joint return or just go to turbo tax and fill one out just for her? She can document $420 in income from multiple sources. Not even sure we’ll even qualify for any FA, so not sure how worth it is it to go through this.
She is the only one who needs to amend. I will give you the answer I always give: You can choose whether or not to amend. If not, she won’t be able to get federal aid, including a loan. Beyond that, though, now that you are aware that she should have filed, you are aware that she should have filed.
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We consolidated our home loan on our primary home and our second house. Now we pay just one mortgage for the two houses. How do we determine the net worth of the second house as asset on our fafsa form?
I know it likely varies from school to school, but how consistent is need based aid from year to year once enrolled? For example, if I receive a 10K raise this year, would that substantially reduce a need based award for the following school year?
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Did your daughter already file a 2020 return for herself? If not, she needs to file one, I would think.
Determine the split you had at the time you consolidated. For example, if it was 60% second home & 40% primary, that is the split you would use to determine the current portion of the outstanding mortgage attributable to the second home. The market value of the second home less the portion of the mortgage attributable to that home is the value.
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That is a question best answered by each school. Every school has its own policies regarding future aid. At the private grad school where I last worked, I did not reduce need based grants for year 2, even if income rose. However, at the last public U where I worked, there were very rigid policies that dictated aid. Any increase in parent income “could” affect aid. Enter the expected parent income into the school’s NPC to get an idea of how aid might be affected.
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She did not, as we had no idea she had to report anything over $400 in self employment. I have no idea how to even go about having her file a 2020 return since she is claimed as a dependent on our return and doesn’t have an income with a W2 or 1099. My husband has multiple W2s, 1099s and schedules for his employment so we have a professional do our joint return. It looks like there’s a form called 1040X—is that hat she needs to do? Or just have her own 1040 with less than $500 income claimed on it? I don’t mind doing an amendment for her but not down for paying hundreds of dollars to have a professional do it. I’m assuming what she’ll have to pay in self employment taxes will be very minimal.
You do not need 1099 forms to file a tax return for self employed income. You just need to declare the amount.
@BelknapPoint what would a $400 or so earner from 2020 need to do to file a late return?
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File a 2020 1040 form and pay any late filing penalty and perhaps interest, depending on what is owed. A 1040X is used to correct a previously filed return. That doesn’t apply here.
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You can’t report the earned income of a minor dependent on a parent’s tax return. Certain unearned income, yes; but not earned income. If you want to be in compliance with tax law, it’s worth it to go through it.
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Can someone help me with this? My D21 is currently in college but planning to graduate early and do a job a for a year and start her already admitted professional college starting Aug 2025. As you all know, my D24 graduates in May 2024. Can I still claim that D24’s sibling is in a college? Will D24 have any advantage of the situation with finances. I was running NPC for NYU and noticed 25K more if I say she has sibling in college vs not in college.
Beginning with the 2023-24 award year, FAFSA will no longer give a break in the EFC for more than 1 in college. NYU may or may not choose to count additional family members in college for their institutional aid - only they can provide that answer, which may be different in the future than it is today due to the federal change. If they do choose to count additional members in college, it would not be on FAFSA. It would be information collected on the CSS Profile that would be used. Only the individual school would be able to address who they would count. I don’t know if schools have that policy ironed out yet for award year 2023-24 and beyond, but you would need to contact the school to ask about it.
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Is there any reason not to accept four years of subsidized loans if we can pay them off in full prior to graduation? Seems like this would allow us to dip into our 529 more slowly and spend someone else’s money until the end of year four.
You can only say the sibling is in college concurrently IF the sibling is actually in college concurrently. If not…you can’t say the sibling is in college.
How much is the loan processing/origination fee? That might be a reason not to take the loans, depending on the cost and your tolerance for forking the money over.
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Agreed. Subsidized loans have an origination fee of 1.057%, which is withheld from the loan disbursement but must be repaid. Grad loans have an origination fee in excess of 4%, but there aren’t any subsidized loans at the grad level.
theres a limit on subsidized amounts, right? i’m thinking it’s what the college offers, and not the full amount of student loan? don’t remember this all anymore
Yes. There is an amount “up to” which a student may borrow each year. The amount is dependent on year in school, but it is limited by need. That is, Cost of Attendance - Expected Family Contribution - Pell Grant - SEOG -institutional grants - scholarships - Federal Work Study = Remaining Need for subsidized loan. If Remaining Need is greater than or equal to the maximum annual subsidized loan award for the student’s year in school, the student can borrow the full annual subsidized loan award (freshman, $3500; sophomore, $4500; junior/senior, $5500). If Remaining Need is less than the annual subsidized loan award, the student is eligible for a subsidized loan in the amount of Remaining Need. No Remaining Need, no subsidized loan. In addition, there is a cap on the total amount of subsidized loans a student can borrow over their undergraduate career ($23,000).
Your student might be offered up to $3500 freshman year (and the amounts listed above for soph to sr years) or may be offered no subsidized loans at all. It all depends on the EFC/need and other aid.
Each student gets offered the same amount in federal loans - $5500 to freshmen of which $3500 MIGHT be subsidized.