What goes in Q89 & Q90 on FAFSA and PI-155 & PI-160 in CSS-Profile

Paying for College
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<h2>I am using the 2009 Edition of the "Paying for College Without Going Broke" book from The Princeton Review as help for filling out financial aid forms. Their explanation for Q89 & Q90 on the FAFSA and PI-155 & PI-160 on the CSS-Profile seems to contradict the directions from those 2 forms' online help. The book makes the case that these are used to calculate how much social security tax each parent paid and to determine whether they qualify for the employment allowance so you want them to be as high as possible (whereas with other income questions the goal is to get a lower value). The online FAFSA help for questions 89 and 90 says:</h2>

<p>How much did your father/stepfather earn from working (wages, salaries, tips, etc.) in 2008 (question 89)?
Answer this question whether or not your father filed a tax return. </p>

<p>This information may be on the following forms: </p>

<p>2008 W-2 Forms - box numbers 1 + 8, or
IRS Form 1040 - lines 7 + 12 + 18 + Box 14 of IRS Schedule K-1 (Form 1065);
1040A - line 7; or </p>

<h2>1040EZ - line 1. </h2>

<p>Following those FAFSA directions would mean excluding 401k contributions whereas following the book's recommendation would mean including them (or in effect using the value from box number 3 of the W-2 forms rather than box number 1). The book's claim does make some sense because the numbers in FAFSA Q89 and Q90 are already represented by being a part of the number from Q86 (parent's AGI). And in the case of the CSS-Profile the numbers in PI-155 and PI-160 are also represented in previous questions. </p>

<p>So, what are the correct directions for what to include in Q89 and Q90 in FAFSA and PI-155 & PI-160 in CSS-Profile?</p>

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<p>For FAFSA those questions are only used to calculate allowances for work related expenses such as FICA taxes. The EFC formula uses tables within the formula along with the earned income amounts to calculate things such as FICA (I always wonder why they don’t just ask for the amount of FICA you paid but I guess they have their reasons)</p>

<p>from the instructions for filling out FAFSA</p>

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</p>

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<p>swimcatsmom, thanks for the response. I agree about them needing to ask for the FICA.</p>

<p>Where did you get those FAFSA instructions? I don’t remember seeing the line that says "The amount reported here will receive certain income allowances (deductions) from the income for necessary expenses (such as taxes and basic living costs). " It seems to support the recommendation from the author of the “Paying for College…” book to include pre-tax income like 401k contributions. However, the rest of those instructions talk about getting the income information from the IRS form 1040 which would not include 401k contributions. The income on line 7 of the 1040 form comes from Box 1 on the W-2 rather than Box 3.</p>

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<p>[Completing</a> the FAFSA: Financial Aid from the U.S. Department of Education](<a href=“http://studentaid.ed.gov/students/publications/completing_fafsa/index.html]Completing”>http://studentaid.ed.gov/students/publications/completing_fafsa/index.html)</p>

<p>They don’t have the instructions up in HTML format yet so you have to download it in pdf format where it says:
“You can download Completing the FAFSA, 2009-2010, in PDF format in English and Spanish.”</p>

<p>The instructions are published every year but, unfortunately, they are not made obvious enough so people don’t know about them.</p>

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<p>I found further information on the internet that supports the author’s recommendation. I found multiple references to an EFC Formula Guide (e.g. <a href=“http://ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf&lt;/a&gt;) which has worksheets for manually calculating the EFC. Lines 10 & 11 on page 9 and Table A2 on page 18 show that the FAFSA questions 89 and 90 are being used for a Social Security Tax Allowance. Using just the amounts in the W2’s Boxes 1 and 8 would result in an incorrect allowance for some people.</p>

<p>The website [FinAid</a> | Financial Aid Applications | Income Earned from Work](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid) has a good explanation as it related to the 06-07 version of the FAFSA, but I think the problems and workarounds it noted are still relevant for the 09-10 version.</p>

<p>My conclusion is that the directions for FAFSA Q89 and Q90 as well as the CSS-Profile PI-155 and PI-160 questions are incorrect, incomplete, and/or misleading. I also noticed that the directions on the online form, the web worksheet, and the instructions PDF listed in a previous post are not entirely in synch.</p>

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<p>Is it true that we need to show them actual bank statements? Doesn’t make sense to me.</p>

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<p>There are a lot of weird things in the formula. For instance an allowance for state tax is calculated using tables in the EFC formula. The tax rate shown for my state is not accurate at all. And asset protection allowances for a single parent are @ 40% of those allowed for 2 parent families (a pet peeve of mine even though we are a 2 parent family - just seems ridiculous).</p>

<p>I don’t know who comes up with this stuff.</p>

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<p>Any one know if it’s true about showing copies of present actual bank statements? What would it prove?</p>