filing-the-fafsa-2015-2016-edition

Filing the FAFSA 142
• Applicants who have not yet filed their federal income tax returns may be tempted to report
the total income tax withholding figures from the last pay stub of the year. This figure may vary
significantly from the actual federal income tax figure; similarly, for total estimated tax payments.
Using the federal income tax figure from the previous year’s federal income tax return will usually
be more accurate if the adjusted gross income from the prior year is close.
• Incorrectly claiming head of household status. If the student or parents filed income tax returns
with the wrong filing status, they will have to file amended federal income tax returns (IRS Form
1040X) before the college can disburse the student aid funds. This can cause delays in the awarding
of financial aid.
• Specifying the wrong type of income tax return. Taxpayers who filed an IRS Form 1040 but were
eligible to file an IRS Form 1040A or 1040EZ should check the box for IRS Form 1040A or 1040EZ.
(Note that a taxpayer who itemizes deductions is not considered eligible to file an IRS Form 1040A
or 1040EZ, even if that was the only reason why the taxpayer filed an IRS Form 1040. A taxpayer
who files IRS Form 1040 only to claim the earned income tax credit, the American Opportunity Tax
Credit or the Lifetime Learning Tax Credit may check the box for IRS Form 1040A or 1040EZ.)
Errors Involving Income
• Incorrect income earned from work. Some applicants will report the same figure for adjusted
gross income (AGI) and income earned from work. These figures are unlikely to be the same, since
adjusted gross income adds unearned income to the total and subtracts various exclusions from
income.
• The earned income tax credit is not the same as income earned from work, despite the similarity of
the names.
• The FAFSA asks for the taxable portion of certain forms of need-based student aid so that they
can be excluded from income. Note that income reported on the FAFSA is based on the tax year
(usually the calendar year), not the academic year.
• Supplemental Security Income (SSI) is not the same as Social Security Disability Insurance (SSDI).
Do not confuse them, even though the acronyms are similar.
• When reporting contributions to qualified retirement plans, show only the employee’s
contributions. Do not show the employer’s contributions.
Errors Involving Assets
• Report the net value of assets as of the date the FAFSA is filed, not necessarily the end of the most
recent calendar year.