Didn't file taxes, above minimum to file but owed ##Question_Title##. Will this affect my app for federal student loans?

Question

I was somewhere around $11-12k, about 75% from internship, 25% from university student employment. The IRS minimum to file was $5350 but when I calculated out what I owed, I was in a tax bracket that owed nothing. I figured I was in the clear and just didn't do it... until I filled out my FAFSA a few weeks ago and it gave me an error for entering "will not file" and my income. So I changed my income to $0 and it all went through. Is this going to keep me from getting federal Stafford loans? Worse yet is the IRS going to come after me for their... zero dollars? (I assume they'd come after late fees if anything.) Or is this something that is likely to go unnoticed?

Answer 1

This will not go unnoticed... trust me.

Not filing taxes was a bad decision... did you not see all of the taxes that were withheld from your paychecks?  By not filing, you are just GIVING the government this money that is really YOURS!  If you do your taxes (even late) you would get most of this money back, PLUS the stimuls check for 600 dollars if no one claimed you on their taxes.  

This is what you need to do:

Putting 0 on your fafsa as income earned from working (in your case) incorrect and punishable by jail time and up to 20K in fines.  You DID work in 07 and your application will be checked against records and when it comes back with an error, you will be asked to PROVE you didn't earn any money.....which may kinda be hard with internship and university employment... Well DUH!   LOL  

Find your W2 forms and file your 2007 taxes... then go back and correct your fafsa application.  They don't want to know you made 12,000 dollars last year, they want to know you make EXACTLY $11,871 dollars last year and had a EXACT 281 dollar tax liabilty last year.  Fill out the form carefully and read all instructions.

It's not the IRS you need to worry about... they are happy to keep your money.  You need to worry about correcting your fafsa.  You won't get a student loan until ALL of your income is accurately entered on your fafsa.  Expect lots of delays because you will be selected for verification and won't get your loan money any time before school actually starts.