FAFSA but not filling tax?

Question

im 17 years old and employed. I aplied fafsa but today the financial aid office tell me that i need to file my "OWN" tax since its over 8000 in a year. but my parents filed the "child tax" instead. (cos they thought that it is an option to have, either we want the child tax or my own tax since im still underage)

i plan to file it, but im afraid they are going to charge me again for my college fee (Which they already waived it and i already sign for my fall classses)

my questions are..

*are they going to bill me back the unit fees if i dont file my tax?

* is it better for me to file/not to file my tax?

thank you very much,

Answer 1

If  you are a single dependent (and someone can claim you on their taxes as a dependent) you must file a tax return if your earned income was over $5350.  

You must file a tax return if your unearned income was over $850.

Yes, you need to file a tax return in order to complete your FAFSA.  Your financial aid officer is correct.

Yes, it is better to file the taxes.  Do the right thing.

Unfortunately, many tax preparers don't seem to know this rule in regards to tax filing and completing FAFSA's.

Answer 2

You made quite a bit of money last year and are required by law to file.  I think the max you can make and NOT file is 3,000.  If you file you will get most of the federal and state taxes that were witheld AND be able to satisfy the fin aid office.

*Check with your school if you are worried they are going to charge you for your tuition

*File your taxes, its the law... every year you must do this (plus the money you get back will be yours)

*Have your dad fire his accountant

Answer 3

There are options when it comes to whether or not your parents file the so-called "Kiddie Tax" or whether you file on your own. The right choice depends on financial circumstances that I couldn't possibly know - that's why your parents probably pay an accountant to give them just that kind of advice.

I'm assuming your parents chose the tax treatment they did because it saved them and you money, but that doesn't mean that their choice can't have negative implications somewhere else. In this case, it looks like not filing your own tax return has a negative impact on your eligibility for federal student aid.

Your personal income of $8000 is not going to have a dramatic effect on your EFC (expected family contribution), because there is an automatic "income protection allowance" of $3080 for you. If you filed a tax return, you would be allowed to deduct the state and federal taxes that you paid, plus some portion of the social security taxes that you paid. The remaining amount will then be cut in half - and this will represent the "Student's Contribution from Income".

If you do not file a tax return, you enter the total income, without deductions for taxes paid.

Apparently, you were selected for income verification by the federal government - or, the financial aid department is fairly confident that you will be selected for income verification, based on the information that you provided on your FAFSA.

If the Department of Education does select you for income verification, they will require you to provide additional documentation of things you reported on your FAFSA. They can, and will readjust their calculations, based on the updated information that you are asked to provide. Yes, this may affect the determination of how much you are able to qualify for in aid, but if you don't respond to the request for more info (whether from the government or from the financial aid office), you may risk being cut off altogether.

Talk to the financial aid office, and have your mom and dad talk to their financial adviser. Your college isn't requesting a different treatment of your finances to be mean or difficult - they're requesting it because they feel that it would give a more honest assessment of your financial circumstances and your ability to pay. You're not going to have much choice in deciding whether or not to do it - it's either give them what they're asking for, or they'll be required to suspend your aid.

Good luck to you!