Monday, March 4, 2013

Taxes and the FAFSA

Each year, the FAFSA has to be completed for any time that a student will be enrolled in a college. The FAFSA is like the gateway to financial aid since you have to complete the FAFSA in order to obtain other grants, scholarships, and loans. Because of this, the FAFSA needs to be correct. Fortunately, students have the ability to correct it.

That being said, when it comes time to fill out the FAFSA, should you wait to fill out your FAFSA until you have your taxes? That will depend on your school. Schools with enrollment beginning in the fall usually require the FAFSA to be required a couple months earlier than July 1 (depending on the state). Schools with open enrollment through the year will allow you to fill out your FAFSA anytime before you start.

The problem is what happens when your school requires you to fill out the FAFSA no later than April 1, but taxes aren't required to be done until April 15. What do you do?

You have to perform an educated guess, or the best guess as to your tax information as you can. Think of how many exemptions you will have, use your W-2 information, estimate the tax. If you do this, however, you should go back and update your FAFSA to match what the tax information came out to be. Some people will put in the previous year's tax information as a guess, but the problem with this is there could be big differences that you aren't aware of or have forgotten about which can change your eligibility very quickly. So, it's best to guess as closely as you can. If you're at the open enrollment school, then you probably should wait to fill it out until you have your taxes completed. The exception to this is if you don't have your taxes done later than April 15; in that case, estimate but also complete your taxes as soon as possible.

The key is to have the correct information, so make sure you go back and double check.

1 comment:

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