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fafsa questions - displaced homemaker and income tax

kimberly600kimberly600 Posts: 3Registered User New Member
Does income tax question refer to state income tax, or a percentage of wages? I've not done my tax return - not sure what figure they are looking for.

Displaced homemaker - new this year
I am employed full time, but underemployed.
I am making same salary as I was 23 years ago when I held a VP Sales position in a company. Then I took 10 years off to have and raise my 4 kids, got divorced in 1999 - received alimony for 4 years, went back to work.
At this point, no alimony (just child support) and underemployed as admin asst. I also have a master's degree.
Do I qualify -?
Thanks

K
Post edited by kimberly600 on

Replies to: fafsa questions - displaced homemaker and income tax

  • sueinphillysueinphilly Posts: 4,207Registered User Senior Member
    I don't think they have your scenario in mind. If you are working you are not dislocated (IMO). Your reduced income from 2008 will be reflected in your EFC.

    # Question 103:A new question on the FAFSA, this one can be confusing. A dislocated worker is someone who meets ONE or more of the following:

    * Lost their job or been laid off.
    * Is receiving unemployment benefits and is unlikely to return to a previous occupation. (like a telephone switchboard operator, for example)
    * Is self employed but is unemployed due to economic conditions or natural disaster.
    * Is a displaced homemaker - someone who previously provided unpaid services to the family, like a stay at home parent, is no longer supported by a partner, and is having trouble finding a job.

    # A dislocated worker is NOT:

    * Someone who quit.
    * Someone who got fired for cause.
    * Someone who just doesn't want to work
  • kelsmomkelsmom Posts: 12,527Super Moderator Senior Member
    I don't think you would qualify, but this is all pretty new. I understand where you are coming from - after 20 years off, I now make less than I did 20 years ago. Here is the thing, though ... the only thing being classified as a displaced homemaker does for financial aid, at least as far as I can determine (we haven't actually worked with this yet), is qualify you for the simplified needs or automatic 0 EFC formulas - essentially, it waives the need for being eligible to file the 1040A/EZ OR receiving federal means tested benefits portion of the eligibility for SN or auto 0. You would have to have an AGI of less than $30k for auto 0 or an AGI of less than $50k for SN. SN will ignore your assets. If you already are eligible to file 1040A/EZ you are eligible for SN/auto 0 with the correct AGI, anyway.
  • kimberly600kimberly600 Posts: 3Registered User New Member
    Sorry - what is SN?
    I am eligible to file 1040A except I chose to itemize deductions (ie., lots of medical).
    Thanks -

    Does anyone know the answer to the other question about income taxes? I am not sure what figure to use on the FAFSA?

    K
  • zoosermomzoosermom Posts: 24,022Registered User Senior Member
    What is a displaced homemaker?
  • swimcatsmomswimcatsmom Posts: 14,996Registered User Senior Member
    On FAFSA they are asking for your federal taxes. Not the deductions your employer took (though you can use them when estimating, an correct later) but the 'total taxes' from your federal tax return. You do not report state or FICA taxes on FAFSA. An allowance for these is calculated using tables in the EFC formula (you don't so anything).
  • kimberly600kimberly600 Posts: 3Registered User New Member
    Someone said it was 7.65% of the total wages. Does that sound right to you?

    Thanks for your help
  • swimcatsmomswimcatsmom Posts: 14,996Registered User Senior Member
    Is what 7.65% of total wages? FICA (social security) tax allowance in the EFC formula is 7.65% of earned income up to a cap, but you do not put these on FAFSA.

    If you are talking about federal income tax then no it is not 7.65%. You get the total tax number off your tax return. It is not a % you can guess at - there are tax allowances where you don't pay tax on part of your income, then the rate varies depending on your remaining taxable income.

    You said you do a tax return and itemize - your tax that you show on FAFSA is the total tax figure from your tax return.
  • kelsmomkelsmom Posts: 12,527Super Moderator Senior Member
    SN is simplified needs. It's the formula that ignores the value of assets. You qualify if you make less than $50k agi AND you are eligible to file 1040A/EZ (you are not; once you itemize you are no longer considered eligible) -or- someone in your household received federal means tested benefits during the past 2 years (WIC, TANF, free/reduced lunch, SSI). I believe the dislocated worker/displaced homemaker would replace the 1040A/EZ & federal benefits requirement.

    If you have a job, you aren't a displaced homemaker - it states *is having trouble finding a job.* You have a job, so aren't having trouble finding one.
  • IlliniMomIlliniMom Posts: 32Registered User Junior Member
    Hi there Kimberly600....I am a displaced homemaker( which by the way, is a very old fashioned term!)
    I was a stay at home mom for 16 years, then divorced 10 years ago, and have been trying to find work ever since...not easy when your main work experience is in the last century....
    trust me, there are few, if any, advantages to being in this position...though I did answer that question on the FAFSA, it doesn't really help us....when you are on the bottom, you really cannot go any lower....
    I hope that eventually you can work your way up into a better job....
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