<p>My mom makes under $10,000 and I make under $15,000 a year, and my dad is unemployed. We live basically on my financial aid and the income of mine and my mom. If my mom claims me as her dependent for 2014, will my EFC goes up in the next year? (for now, it's zero). It is because I heard that if my mom claims me as her dependent and I make more than the limit of $6000, I will not be qualified for FAFSA or the package will be reduced. Plus, can she actually claim me as a dependent if I make more than her? There is no clear amount to indicate that I support myself so I can file as the head of the household, or will it be in my favor if I file as the head of household and claim my parents? I pay for almost all of my expenses. We share insurances and rent expenses, and my mom takes care of the food. What should I do to ensure my package remains the same?
Thanks all,
W.</p>
<p>Does your dad receive unemployment payments? Did he earn anything this past year? Did he get a severance check?</p>
<p>You are a dependent student for FAFSA purposes if you are under 24 and don’t meet other situations that have nothing to do with what you make. Look up the definition of dependent student/independent student for FAFSA. Ddependent students automatically qualify for a zero EFC if both (1) anyone included in the parents’ household (as defined on the FAFSA) “received benefits during the current or previous tax year from any of the designated means-tested Federal benefit programs: the SSI Program, the Food Stamp Program, the Free and Reduced Price School Lunch Program, the TANF Program, and WIC; OR the student’s parents filed or are eligible to file an IRS Form 1040A or 1040EZ (they are not required to file a Form 1040) or the parents are not required to file any income tax return; OR the student’s parent is a dislocated worker. AND (2) the income of the student’s parents is $24,000 or less”.</p>
<p>If you qualify for that or the “simplified needs” test (look it up) your income doesn’t come into the equation nor do assets.</p>
<p>If your parents income or tax situation or whatever does not so qualify, you may not get a zero EFC. There really isn’t anything you can do to prevent that from happening. It’s based on what actually happend. If your income enters the picture, yes, 1/2 of anything over $6K automatically goes towards EFC. </p>
<p>Did you earn that $15K from work study or other financial aid? Such earnings are taken out for FAFSA calculations. Run an estimated EFC from one fo the quick calculators and see if you are running into any issues.</p>
<p>FAFSA has its own rules for dependence that does not necessarily follow tax guidelines. You do have to look at IRS rules to check who is a dependent for tax purposes. That does not affect the FAFSA definitions which are quite clear.</p>
<p>I’m curious…what do you do that you earn $15k per year?</p>
<p>I want to be sure that the $15K a year does not include financial aid grants. </p>
<p>An issue I see here is for tax purposes. I am not a tax expert so do check out what I am saying: I thought that if the child is providing half or more of his own support, then the parent cannot claim the child as a dependent. That can have ramifications in terms of the Earned Income Credit that low income parents can take. The OP cannot claim the mother as a dependent because she makes more than the $3K or so that is the limit. The father, if he does not make any money or is under the threshhold… well maybe he can be claimed as a dependent, but the thing is, it’s very confusing to me as there is a married couple involved here I suggest talking to the IRS for clarification on the best way, the correct way your family should be flling taxes, given your situations. </p>
<p>Also, if you are getting PELL or other grants over what are considered qualified expenses (tuition, fees, books, other listed expenses by the IRS–not room, board , sundries, ) those become taxable income though they are not used by FAFSA for EFC calculation</p>
<p>How long have you been in school? It seems like you’ve been going for a long time. Are you running out of Pell soon? </p>
<p>Are your parents now living in the US? Weren’t you getting married a year ago?</p>
<p>If your father+mother earned 10K total in 2014 they do not need to claim you as dependent - they will not owe any taxes anyway. You cannot claim to be a Head of Household because your mother earned too much so you should file as single and use your personal exemption yourself. You may be entitled to educational credits that will further minimize your taxes if you actually paid for tuition+fees+textbooks.
You can look at the scenario where your mother files as married filing separately and you file as HOH with your dad. Not sure if this is allowed and if it brings any tax benefits anyway. As mentioned above you should call IRS. If agent says it is allowed get his name and badge number just in case.
Finaid is a different story. It does not depend on who claim your personal exemption. Actually for FAFSA if you pay less money in taxes your finaid may go down. If your income includes workstudy or coop then it does not count as income for FAFSA. You can use FAFSA forecaster to see what will happen next year and try different scenarios. <a href=“https://studentaid.ed.gov/fafsa/estimate”>https://studentaid.ed.gov/fafsa/estimate</a></p>
<p>Thanks both of you for your time and consideration. Yes, only my mom is working, my dad is too old to be able to be considered for any job, sadly. We just came to US about 5 years ago, so thats why. I work at a retailer so my income roughly about $15k a year. My mom just work part time cause she’s old too, hence the $10k a year. We are kind of in a dilemma. I have been going to school for 4 years, just transferred to a 4 year school this semester. So, like CCDD said, if my parents’ income is not over $24k a year, my income might not come into account? I do not think I can claim as the head of the household tho( yeah, im single). I ran a check from an online tool, they say something like, if my parents make under the limit, they will take the difference to add up to my limit over that $6000 limit. Let’s say the limit for my parents is $24k and my mom makes $10k, they will take $14k to add to my $6000 limit, so I can make $20k a year without affecting the package. However, I want to confirm that from you guys experience. CCD said if my parents make 10k in 2014 they do not need to claim me? Is 10k the limit for them to file a tax return?
Really appreciate the help from both of you.
Thanks again,
W.</p>
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<p>Just be aware that you will soon run out of Pell eligibility. Not sure how old you are, but soon you may be considered an independent. </p>
<p>Get your degree ASAP. </p>
<p>are your parents citizens?</p>
<p>Whoa there. Did you carefully read what i wrote in #2 above? There are specific things that qualify you for an automatic zero EFC. Read the requirements. Your income does not come into the picture for the auto zero EFC.</p>
<p>Please understand that you are depend on your parents on FAFSA regardless of what your status will be on your tax returns if you don’t meet the FAFSA independence criterion which have nothing to do with what you make or if your parents support you.</p>
<p>Tax issues are a whole other thing, and you should get advice from tax experts to see if there are any advantage for your parents to file a return and how those returns can best be filed. </p>
<p>Do not mix FAFSA and tax forms. Your last post makes no sense because that is what you are doing. Do look up the automatic zero EFC test for which I believe you qualify. Make sure you meet all the criteria. YOU can make ANY amount of money , $100K, whatever and still qualify because student income is not considered for it. But that has nothing to do with your tax status. A whole other story there.</p>
<p>Well, I think I should put tax things aside from now. Cause, at the end, like you said, it’s only the FAFSA calculation matter. I just had time to read through the Simplified need test. Yes, it depends on so many other things other than income. Yea, you guys made the point clear to me. There is no way to alter the way I file tax to keep the EFC remains 0, just let them calculate the fact. I expect to graduate in 2016 tho, so just before the Pell ran out. </p>
<p>It’s not ONLY the FAFSA thing that matters. However, I don’t think rearranging anything for tax purposes is going to change your FAGSA stuff. If you can get on the free lunch or ANY of those programs and make sure your mother is eligible to file one of the shorter tax forms, then you are home free with your income for FAFSA and get your automatic zero EFC. THe crucial things are that YOUR PARENTS" AGI is under $24K and can be filed on the shorter 1040 forms (EZ OR 1040A, I beiieve, but check your self)–your income won’t matter if that is taken care of, you can make a million dollars and still have a zero EFC.</p>
<p>But as to how your parents file taxes, and you file taxes are whole separate issues and, might make a difference as to who gets Earned Income credits, dependent allowances, possible college tax credits, etc and etc. I am not able to advise you about that–no tax expert and so you need to get help there from someone who is. </p>
<p>Good luck and I give you a salute for taking care of your things and for your parents too.</p>
<p>I will surely check the tax stuff with the IRS. My parents do not understand much English, so the taxes and other documents are all for me to take care of. Through all the years I have received Financial Aid, without the clear understanding of how Financial Aid works, I have been wondering whether should I work or not, cause I do not want to sacrifice the time I could have spent to study to go to work and get taxed and get my package reduced. However, later on, I just realized that my family’s earning is not even close to the limit for my package to get deducted. Managing these things along with school and work is not easy at all. </p>
<p>@wayneluu91 </p>
<p>Would your parents be better off in their home country? Would they receive a pension or some kind of support there? Their future here seems rather bleak. No Social Security…doesn’t sound like they’d qualify for medicare. Do they have insurance? </p>
<p>lol no, not exactly like what you think, but thanks for caring about my situation. We are legal citizens. They both have social sec # and medicaid, me too. It’s just we came here not at the perfect time in their lives, but for me it is. Back in the home country it is even worse, no pension, healthcare, whatsoever. Plus, they let go of everything there to go with me and for me, so they have nothing there anyway. I am doing my best to get a degree then a good employment as soon as possible so they can have a peace of mind in the old age. It’s not easy. It’s not like a normal life whereas I was born here and I just have to study without worrying about my parents because they have retirement plan and stuff. I will take care of them later on too. Nonetheless, there is nothing stronger than that motivation and pressure which drives me toward the degree. </p>