Cash "under the table"

kelsmom
Fri, 09 Mar 2012 12:32:40 +0000

This is actually a very good question, and I hope students are paying attention to the answers. If income from self employment is > $400, you must file taxes. Here is the problem from a financial aid standpoint: Students and parents indicate that they earned $1000 from miscellaneous work, but they didn’t file a return. This is called confliction information, and the student will not get aid until the situation is resolved. If a return was not filed but should have been, the student/parent will have to file that return in order to get aid. They don’t “have” to file it … they just have to IF they want to get aid. And if it’s late, there could be a penalty involved.

I had a student whose aid I had to hold up last year for this reason - he earned more than $4000, though. In the end, he ended up with write offs and tax credits that actually gave him a refund … so it’s not all bad! :)