<p>They are certainly not “hidden” to the US government! A US Savings Bond listed in either the child’s name or the parent’s name is a debt obligation of the US Treasury to the specific person listed on the bond. The US Treasury Department knows to whom it owes the principal and interest on the bond. </p>
<p>Now, it’s true that under some circumstances savings bond owners have the option not to report the interest on their tax returns until the year they cash the bonds, but the US government still knows the identity of the person listed on Treasury Department records as the savings bond owner all along.</p>
<p>Anyone who thinks that savings bond assets are “hidden” from the government is kidding themselves.</p>
<p>I don’t know if this is a viable option and welcome input. What if a kid wants to go to an out of state public school and tuition it around 20+k plus room and board. So the kid goes to the OOS community college/ paying the out of state fees, then declares residency in that state and pays the last 2-3 years as a state resident. Is that doable or will they always be considered an OOS student? How long would it be before they could declare residency, providing they live there and work there?</p>
<p>^^no, not doable unless said kid becomes financially independent from the parents. Residency can be claimed in as little as 90 days, provided that the kid is self-supporting.</p>
<p>FAFSA may not ask about depreciation, but some FAFSA (Berkeley) schools still ask to review your schedule C and add it back in :eek: unexpectedly!</p>
<p>And some FAFSA schools (UVA) ask about cars, year, make, etc</p>
<p>Most States you cannot be going to school while trying to establish residency. An independent student or the parents of a dependent student generally have to have lived in the State for a year - sometimes more - before starting any schooling to be considered instate for tuition. Most States also consider you a dependent on your parents (using the same criteria as for financial aid) and your residency status is based on your parents State of residence. I keep saying ‘most’ because there are exceptions. so you would need to check with each State. In general is is very hard to change from OOS to instate tuition - there would be no one paying OOS tuition if it were that easy.</p>
<p>Each campus a little different; Here’s what UCLA says</p>
<p>Note that the financial independence requirement makes it extremely difficult for most undergraduates whose parents are not California residents, including transfer students from community colleges and other post-secondary institutions within California, to qualify for classification as a resident at a University of California campus. </p>
<p>"California Residency Information
To be considered a California resident for purposes of fees, an out-of-state student must have lived in California for more than one year preceding the residence determination date, relinquish residence in other states, show an intent to establish residency in California and demonstrate financial independence. Unmarried undergraduates from other states qualify as financially independent if they were not claimed by their parents or others as dependents for tax purposes for two preceding tax years and if their annual income is sufficient to meet their needs. All married students and unmarried graduate and professional students from other states qualify as financially independent if their parents or others have not claimed them as dependents for tax purposes for the preceding year.</p>
<p>Other out-of-state students who qualify as financially independent include veterans of the U.S. armed services, students with legal dependents other than a spouse, students with both parents deceased, students who are wards of the court, and students who are at least 24 years of age by December 31 of the year they seek to be classified as residents."</p>
<p>somemom, memory is fading but I got the vehicle questionnaire from a couple and (I think) Case , while supposedly Fafsa only, sure asked a lot of Profile-ish questions on their required form.</p>
<p>re: residency
Many state schools put it right out there on their web site and it’s not as easy as you neighbor claims their friend did it in "97 If one of the parents isn’t a resident it is really really hard to get in-state unless you take 2 or 3 years off.
For my D, she had to: work full time for the previous year and the currant tax year (2 years…)and file income tax showing we didn’t deduct her and that she supported herself. Register for everything you can; voting, library card, church membership, paying utilities, cell phone, car, etc. Show proof of income for the next year.<br>
It’s not unfair. The taxpayers of one state want to educate the kids from that state, or if not then people who will stay there and pay taxes to educate the original kids.</p>
<p>With tongue firmly in cheek, I ask: Isn’t there anybody on CC who can actually afford to pay tuition for their lovely children?? Perhaps if CC folks spent less time online, and more with their nose to the grindstone, they would have accumulated the wherewithal.</p>
<p>Many on CC can afford to pay for their children’s education but that doesn’t stop them from trying to pay less as is the case with purchasing anything. Lots of them have the money because over many years they paid less for houses, cars, vacations etc.</p>
<p>Hi Everybody, Thanks to you all for helping us newbies learn the ropes with FA. I’m just in the beginning stages of learning about FA, & wonder about 2 things—1) what’s the problem with being self-employed or owning a business?, & 2) what types of retirement plans are not excluded?</p>
<p>I’m self-employed & file on Schedule C. I don’t have any employees, but file as a sole-proprieter. The “business” has no value & it’s not something that I can sell. In what ways am I penalized as a self-employed person?</p>
<p>I don’t deduct for a home office or car mileage. I also don’t deduct for professional entertainment or travel or conferences or advertising. Just some office supplies, phone, etc.</p>
<p>Are there certain retirement plans that are NOT excluded from the FA formulas?</p>
<p>Retirement fund assets such as 401ks and IRAs are excluded from the FAFSA formula. The retirement funds have to be in such a retirement account - you cannot have them in say CDs ‘earmarked’ for retirement.</p>
<p>Current year contributions are not excluded from income (ie - you cannot reduce your income by making a contribution to an IRA - even though your AGI may be reduced by the contribution it is added back in the formula).</p>
<p>katja, we are talking about what a particular college may do. They vary. </p>
<p>Issues that can come up are valuing your business as if it can be sold, when it can’t. Saying it has a value apart from you, when it doesn’t.</p>
<p>Many people choose to invest in real estate for their retirement. Maybe a duplex. They deduct the depreciation IRS allows, the school adds in back. You add on a room, they add the money back onto your return. They count the extra income that new room gave you but won’t let you deduct or even depreciate that costs. Now that $180K duplex that you put $50,000 down on has an equity that is an asset for FA purposes. If it appreciates in value that appreciation is considered but if heaven forbid it drops…no dice.
You can’t deduct business losses from your other income even if you sell it and “realize” that loss.</p>
<p>If you have two different businesses let’s say a fruit orchard for retirement and a dental practice. Let’s say the dental practice makes $150,000 and the orchard as a start-up has losses of $20K a year. Too bad charlie. You spent the money but the college pulls it back in. </p>
<p>Oh, that phone you mentioned. They’ll add that back in if you expensed it or 179’ed it or tried to depreciate it. Sorry.</p>
<p>Very discouraging. Thanks for your input. I’ll start doing some reading about FA, and not plan on too much optimism re receiving $$. Appreciate all of the ideas & explanations in this thread—great beginning for my understanding of FA</p>
<p>It is possible to qualify for in state tuition in 2 states if parents are divorced and live in different states. Some states allow a dependent student to pay in state tuition if the parent claims the student as a dependant and/or pays over 50% of the student’s expenses. So the parent who has custody claims the child on the tax return regardless of support amount and can claim in state in his or her state and the parent who pays more than 50% can claim in state tuition in that state because of the support amount.</p>
<p>If it appreciates in value that appreciation is considered but if heaven forbid it drops…no dice.</p>
<p>Sorry.
What I meant to say was that if it dropped and you sold realizing a loss…no dice. Left out the “and you sold” part. Now if it appreciates and you sell, that’s income. Gimmee da money.</p>