<p>Filling out our renewal financial aid application for next year but now confused with this question:</p>
<p>"Enter the income parent 1 earned from work in 2012 from his or her 2012 W-2 form(s) Box 5. If Box 5 is blank, or he or she did not receive a W-2, use IRS Form 1040, lines 7, 12, and 18 and IRS Schedule K-1 (Form 1065), Box 14 (Code A). If lines 12 or 18 or box 14 are negative, treat them as zero. If your parents filed a joint return, enter only parent 1's portion of lines 7, 12, and 18 and K-1, box 14."</p>
<p>The figure in Box 5 of W-2 form does not equal the amount in line 7 of IRS 1040. (There are no other amounts for lines 12, 18, etc.) Box 5 is much higher and it says "Medicare wages and tips".</p>
<p>Which one should I follow? In the past years, I just followed our 1040 forms but now I wonder if I was making a mistake all along? FYI, there is only one W2 since only one parent works.</p>
<p>I’m bumping this up. I know everyone’s done with financial aid applications and people are now eagerly waiting acceptance letters. But I really hope someone can help me on this!</p>
<p>I would use box 5 like the instructions say. Line 7 will be less due to pre-tax deductions such as 401k and medical insurance contributions. I think the point of the question is the same as the similiar fafsa question, to give you credit for social security and medicare taxes paid. So higher is better.</p>
<p>Yes, do use box 5. From your Medicare Wages & Tips CSS can calculate how much you paid in Medicare tax and Social Security tax – you don’t want either to be underestimated.</p>