<p>Okay. So ive lived abroad for three years now. My question is how to fill out the FAFSA. Since we now live abroad, my parents dont file taxes. So.. no tax returns or w2 form or irs form or watever other tax forms it requires. What would i write for those? Ive checked and i am eligible even though im not currently in the US</p>
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Why? Are they not working? Are they not US citizen?</p>
<p>If your parents are US citizens or legal permanent residents, they are obligated to file federal tax returns each year. Period. However, most citizens and legal permanent residents who are working outside the US find that they do not owe any taxes because of the various tax treaties, and because of the foreign income exclusion. [Foreign</a> Earned Income Exclusion](<a href=“http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion]Foreign”>Foreign Earned Income Exclusion | Internal Revenue Service) If your parents file federal tax returns on foreign income, the numbers are reported converted to USD at the average rate of exchange for the year. For the years that you are applying for financial aid, they also will need to file estimated taxes early in the year so that you have those numbers for the FAFSA (and other financial aid forms). They can file an amended return at any time after that using the 1040x.</p>
<p>If your parents are not US citizens or legal permanent residents, you need to examine the FAFSA application and the other financial aid forms, and use your family’s figures converted into USD at the exchange of the day that you file. There will not be exact matches for some of the lines, but don’t worry about that. It really, truly is OK to contact FAFSA and ask for their advice, or to contact the financial aid offices at the places that you are applying to to get their advice on handling foreign income and assets.</p>
<p>My parents are US citizens as well. They arent required to file taxes right? Referring to the foreign wages exclusion above. Will they have to file for me to be eligible for FA?</p>
<p>I believe they have to FILE but may not have to actually pay U.S. income taxes because of the exclusion.</p>
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No. They’re require to file US tax returns in order to claim the foreign earned income exclusion. See [Foreign</a> Earned Income Exclusion - Which Form to File](<a href=“http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---Which-Form-to-File]Foreign”>http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion---Which-Form-to-File)
Also see [Publication</a> 54 (2012), Tax Guide for U.S. Citizens and Resident Aliens Abroad](<a href=“http://www.irs.gov/publications/p54/ch02.html#en_US_2010_publink100047371]Publication”>http://www.irs.gov/publications/p54/ch02.html#en_US_2010_publink100047371)
I think so but not 100% sure that they have to file tax returns for you to be eligible for Federal financial aid. I know for sure that they don’t have to file tax returns only if there gross incomes were below the limits. See [Publication</a> 17 (2012), Your Federal Income Tax](<a href=“http://www.irs.gov/publications/p17/ch01.html#en_US_2012_publink1000170407]Publication”>http://www.irs.gov/publications/p17/ch01.html#en_US_2012_publink1000170407)</p>
<p>It is a drag to complete the 1040 forms and backup paperwork, but chances are that your folks won’t owe any taxes, so encourage them to take care of this.</p>
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In that case your parents should file 2012 tax returns ASAP, so that you can file FAFSA for 2013-2014 school year. (Next year, they should also file 2013 returns as early as possible so that you can file FAFSA for 2014-2015 school year.)</p>