Sgt.Sausage wrote:
[...]
- quote -

Nope, if the student is under age 25 their income tax status as a
dependent doesn't count. FAFSA doesn't even ask. And of course over
age 18 it's not a question of being an emancipated minor. This is from
my recollection, the FAQ at the FAFSA web site has more details.

-Mark Bole

"P.Schuman" <pschuman_NO_SPAM_ME[at]interserv.com> wrote in message
news:ATOqh.49295$wc5.36701[at]newssvr25.news.prodigy.net...

- quote -

I don't mean to hijack the thread (But I'm gonna try anyway <grin> )

Back when I was filling this out (for myself (late 80's early to mid 90's))
it was like this for me:

Student Parent
Assets = 0% Assets=0%
Income = 0% Income=0%

Let me explain ...

I started college after a 2 year enlistment in the Army. My income in
college was the Montgomery G.I. bill (which didn't count as "income")
and as a 19 year old kid, I had no assets. At some point, I started
flippiing burgers and delivering pizzas for cash, but the income was so
low it left me wide open for free money.

Due to the fact that I had served more than 1 year active duty, I was
considered an adult, off the parents' dole, and their numbers were not
even considered in the calculations.

***

Just asking: Under what circumstances (currently, today, 2007) do
they take into consideration *only* the student's income and assets and
leave the parents out of the equation.

When I was in school, it was (that I know of) one of three
conditions:

(a) Military service
(b) (Provably) out of the parents' house and not a dependent
on the parents' tax forms for a minimum of 2 years
(c) "Emancipated Minor" status.
(http://en.wikipedia.org/wiki/Emancipation_of_minors)

Do they still do this?

zxcvbob wrote:
- quote -

I learned this the hard way after the first or second year (been filing
FAFSA's going on six years now... two or three more years to go!)

I've even read nationally syndicated columnists talk about "sheltering"
the parents' assets from FAFSA calculation, but as your numbers show
(and I think the 47% for parental income is a little high, but not
much), the parents' current income has a much higher impact -- so if
they are still in peak earning years, the likelihood of need-based
financial aid will be between zero and none, regardless of their assets.

They won't show you the EFC (expected family contribution) until AFTER
you have submitted your numbers, so do-it-yourself "what-if" is not
possible, unlike with tax planning.

- quote -

The FAFSA you file now (Jan-Mar 2007, typically) for the upcoming school
year (Jul 2007- Jun 2008) will ask you for tax year 2006 info. You're
right, your actually income during the school year in question doesn't
count retroactively.

- quote -

There are FAFSA planners who for a fee will help you "game" the system,
but I've never used one. Unfortunately FAFSA formula takes into account
a lot more than just your taxable (let alone adjusted gross) income.
Here, FWIW, is a listing of the FAFSA amounts you must report and how
they relate to your taxable income. I posted this a year ago to
misc.taxes.moderated but with moderator's indulgence will re-post here.

My characterization of the three worksheets is as follows:

worksheet A: government welfare payments to you
worksheet B: untaxed regular income
worksheet C: attaboy's (income already going to education)

============

Worksheet A
Earned Income Credit
Additional Child Tax Credit
Welfare Benefits
Untaxed Social Security Benefits

Worksheet B
Payments to Tax-Deferred Pensions & Savings
Deductible IRA/Keogh Payments
Child Support Received
Tax Exempt Interest Income
Foreign Income Exclusion
Untaxed Portions of IRA Distributions
Untaxed Portions of Pensions
Credit for Federal Tax on Special Fuels
Housing, Food, & Living Allowances
Veterans’ Noneducation Benefits
Other Untaxed Income or Benefits
Money Received (not reported elsewhere)

Worksheet C
Education Credits
Child Support Paid
Taxable Work-Study Earnings
Grant and Scholarship Aid (reported in AGI)

-Mark Bole

P.Schuman wrote:
- quote -


My daughter is a junior this year. I'm maxing out everything that I can
with pre-tax payroll deductions -- 401(k), Healthcare Savings Account,
etc. -- and I'm planning to take $3000 in capital losses from losers in
my portfolio (any more than that and I'd have to carry it over to the
next year.)

I want my adjusted gross income to look really pitiful in 2007. I don't
know how much it will help, but it can't hurt anything.

How are student assets in a retirement account (like an IRA) counted?

Best regards,
Bob

We recently went to our high school's presentation
on financial aid considerations for college.

One of the initial planning items discussed was how the assets
were tabulated by the FAFSA for the student & parent on the forms.

Here is what I recall - but can't find it mentioned on the web ?

Student Parent
Assets = 20% Assets = 6%
Income = 50% Income = 47%

Another discussion was related to "base year",
and basically (like income taxes),
you wanted to reduce the amount of income
you would show in the year prior to filing the FAFSA,
which would normally be your junior year.