<p>I am doing taxes prior to FAFSAs this year. There are, as usual, a number of different ways to do the taxes, tuition and fees adjustment versus American Opportunity credit etc.</p>
<p>For privacy, I will use hypothetical figures. In terms of financial aid, does it make a difference whether the adjusted gross income is, say, $41,000 rather than $39,000? The tuition and fees adjustment lowers the AGI, and increases the tax a bit; the American Opp. Act means a slightly higher income, but quite a bit less tax/more refund.</p>
<p>The choice would seem clear except that I wondered if the schools figure aid the way the calculators do on their sites, with income setgments of of $30-39,000, then $40-49,000. If the possible choices for income figures vary between the top end of one segment and the bottom end of the other segment, will there be a significant difference in aid even though it is only a $2K difference in income?</p>
<p>Hope this is clear.</p>
<p>For estimated taxes for our “will file” FAFSA, I used the tuition and fees adjustment because it lowers the AGI, and I wanted the most faborable estimate of the EFC so that the greatest potential amount of aid could be set aside for Happykid by her colleges.</p>
<p>For the real taxes, and hence for the updated “have filed” FAFSA, I will use the AOC instead. Yes, our EFC will probably go up a little bit, but the overall financial consequences are more favorable for us.</p>
<p>Print out the FAFSA formula itself, so you can tinker with your numbers by hand. For those people who are very close to being eligible for Pell Grants, even one dollar difference in their EFC can be very important. </p>
<p>Google EFC formula guide updated 2013, and you should get the new revision from January.</p>
<p>Thanks, found the EFC info online (didn’t know you could access it and was going to call the schools!). Very helpful. We have other issues like lump sum disability payments that go back a year, so we could conceivably benefit from paying those for 2010 rather than carrying them forward, and get our EFC down in that way as well as by doing the tuition and fees adjustment. Wish me luck! I appreciate the tip!</p>