Charitable Donations

I understand that for both FAFSA and Profile that any deductions for charitable donations are added back and considered as part of the family resources.


<p>The above was posted on the "preparing for finaid" thread. To be honest, I do not believe this is true. Anyone else?</p>

<p>I am pretty sure itemized deductions are listed after the AGI on the 1040. The figure entered on the FAFSA is the AGI so itemised deductions are never shown on FAFSA in the first place - so nothing to be added back. No clue about CSS.</p>

<p>So the statement is both right and wrong. They are included as part of family resources but as they were never deducted in the 1st place for FAFSA they are also never added back.</p>

<p>Okay, I probably worded the original question poorly.</p>

<p>If we donate a used car to a charity in 2008, we'll get a non-cash charitable deduction, which will reduce our federal income tax owed this year.</p>

<p>For FAFSA purposes, I think you do enter the actual federal tax due, which is reduced because of the deduction.</p>

<p>For Profile purposes, I think you enter in your charitable contributions directly, and I understood from a program presented at our high school that those are then added back and made available in the calculation of the family contribution.</p>

<p>D is applying to both FAFSA and Profile schools, and I'm trying to figure out if taking the $2000 deduction for donating the car is a good decision or not from a financial aid perspective.</p>

<p>You are right - for FAFSA you show the actual federal tax (though, oddly, State and FICA tax are estimated based on tables in the EFC formula).</p>

<p>I would think in most cases you would be better off financially taking the tax deduction. Only a % of income goes toward the EFC - I think the maximum % for FAFSA is @ 47% so if you were going to save, say, $400 in taxes then you would be better off with the $400 than having your EFC go down by 188. </p>

<p>There are exceptions where you might be borderline in qualifying for certain situations. For instance, if your income is low enough to be close to qualifying for any Pell grant then you might be better off if you take the reduction in the EFC. Pell eligibility requires below a certain EFC. For 2008-2009 this was below 4042. The minimum Pell for 2008-2009 is $890 so the difference between a 4042 and 4041 EFC is $0 pell to $890 Pell. Also Pell eligibility is required for certain other grant programs such as ACG and SMART.</p>

<p>Another situation might be if you might qualify for the simplified needs test, where assets are excluded from the EFC calculation, or the automatic 0 EFC. For those you have to be eligible for filing a 1040a or 1040 ez which are not if you itemize deductions.</p>

<p>The above is re FAFSA. I have no idea how CSS works.</p>

<p>Few schools think charitable contributions can be reallocated to college payments.</p>