^yes and how will future income affect aid. And what if ex doesn’t cooperate with filling out the NCP form every year?
I was not talking about a non filing form from the college. But the official verification of nonfiling from the IRS.
If it became necessary, would he order it?
@blossom @lookingforward @HRSMom Thank you for your calming words, ok, I will try not to overthink just worry they will ask for documentation & I have nothing for food or clothes, etc.
@wisteria100 I sure hope you’re right they are getting ready to admit her but I suppose it’s just them getting their ducks in a row. Still, seems a lot of work for them for nothing. Yes, UR meets 100% of demonstrated need and is need blind during admissions. I know that word “demonstrated” is tricky, though. Because they are private & meet need, it is one reason we chose them for ED. Afte W&M (denied for ED1) UR is her 2nd choice, she really loves it & it is smaller which is better for her I think. Just still a hard school to get into, sigh.
@lookingforward @mommdc yes, I have to go through this every year and as I have more of an income it will lessen my aid, thats fine & its fair. I just want to get through 2015 right now, lol! My ex did fill out the NCP form but he hasn’t paid his taxes yet and probably won’t till the IRS catches up with him to he had to put in estimated amounts so that may come back to haunt us as well.
I am just trying to organize all this and make smart choices and am very overwhelmed. In other news - I cannot stop eating!!!
OP- this is good practice for you for next year’s income taxes. Folks with self employment income need to be very well organized.
You can receive up to $13,000 as a gift from any person without being taxed. So you can receive up to $26k from your parents per year. This is how parents move their cash to their children’s account to avoid paying inheritance taxes.
The annual limit is a little higher now. And it is not taxable to the recipient. It is potentially taxable to the giver (gift tax). Or it can simply come out of the lifetime exemption (estate tax) if over the limit.
@Madison85 is there a concern about imputed interest for the parents if loan does not charge any interest? I read an article and it said if under $10,000 that is not a concern?
@HRSMom Thanks for the clarification. It’s been a while since I looked into this.
You are right though. Transfers of wealth 28k at a time!!
[QUOTE=""]
Why did you say you didn't think FASFA would give her much? She qualifies for a Pell Grant and Stafford loan which together total $12K I think,
[/QUOTE]
A $5800 Pell Grant isn’t much if cost is $50k…and that Pell Grant and $5500 loan will be part of the aid pkg.
I will have $7250 per yr from my parents College Savings plan and the other grandmother said $14K per yr. + the $12K from Pell Grant & Stafford loan so that is $33,250 I hope that helps. Is FAFSA just those 2 things - is there any other federal aid aside from PG & SL?
As others have already noted, the annual exclusion amount is $14,000 ($28,000 for a married couple) to any one person before the gift giver is required to file a gift tax return and, if applicable (most likely not) pay any gift tax due.
Parents (and others) are not “moving their cash” to someone else’s account to avoid paying inheritance taxes; they are making a gift to the other person that is irrevocable.
And OP- since you noted that the other grandparent is committing to 14K per year… I’m going to guess that this is not a random number, and that the grandparent understands that the annual limit to any single person is 14K before a gift tax return needs to be filed.
BUT- there is no limit if the money is sent directly to the institution. There will likely be some financial aid implications if your D’s grandmother commits to paying tuition on her behalf for all four years. But there is no limit of 14K if the check goes directly to the college for your D’s tuition/fees/etc.
Very good point.
Yes, I had thought of this when we used some last summer for her to go to W& M summer profram for high schoolers The person at their bank pays wherever she does directly from the savings plan. Neater & cleaner for everyone! Yes, that grandmother is a very savvy businesswoman & I think as it’s not coming from a college savings plan she arrived at that # based on the gift thing. She is allowed $14k per yr, she did say she might be able to do more, but I assume that is paying the college directly. As my parents have that college savings plan, they can use any amount of it, in case we need more the 1st yr something.
@cloudysmom I thought I’d chime in with my 2 cents about whether the support from your parents was a gift or loan. I I think it is most accurately characterized as a gift. For example, if you were to file for bankruptcy, your parents would not be able to claim creditor status as there is no proof of a loan. The fact that the recipient of a charitable act would like to repay her helper does not turn a gift into a loan. A loan starts out with a clear premise and understanding on the part of the GIVER that it will be repaid. So, i’d list as a gift to support you when times were tough. Good luck with everything!
@BelknapPoint I don’t think anyone suggested transferors were hiding $. But it is a good way to transfer wealth without impacting your estate tax exemption balance. If you are uber wealthy, there are better ways, but even those folks still give as much as possible annually. I presume this is your career field?
I’m not sure what was being suggested, but “moving cash to a children’s account to avoid paying inheritance taxes” is far from the best way to describe an irrevocable gift.
More like a hobby at this point, but I do have professional training in some aspects of this. Which is a good lead-in to this: folks, there’s good advice and bad advice here on CC, just like anywhere else. You should not rely on any of it.
I guess I missed where someone suggested such behavior then.
<<<
FAFSA just those 2 things - is there any other federal aid aside from PG & SL?
[QUOTE=""]
[/QUOTE]
Fed aid might also include some work study, but that’s money earned as the student works, and usually goes for pocket money. Sometimes, a small amount of SEOG is given, but again, no assurances.
Now you’ve mentioned money coming from grandparents to pay for college. That’s good. Don’t know if THOSE funds will need to be reported.