FAFSA Disaster!

<p>On my previous filling of the fafsa i listed in parent financial information according to 2010, 1040:</p>

<p>Adjusted Income: $70,000
Wages: $0</p>

<p>the efc came out at around $10,000</p>

<p>on the most recent filling according to the 2011 1040:</p>

<p>Adjusted Income: $1
Wages: $76,800</p>

<p>the efc was $0</p>

<p>I copied the information exactly from each 1040 as per the instructions. I can clearly contribute more than 0, the amount of money in my household has increased. Both times were for the 2012-2013 school year. I'm very worried by this. Will the University look at the wages or will they look at the EFC?! This is so messed up.</p>

<p>
[quote]
Adjusted Income: $70,000
Wages: $0</p>

<p>the efc came out at around $10,000</p>

<p>on the most recent filling according to the 2011 1040:</p>

<p>Adjusted Income: $1
Wages: $76,800

[/quote]
</p>

<p>Are your parents self employed?</p>

<p>No, but my dad works abroad and filed a 2555 too. It's not like I have a choice when filling out the data. I'm entering it as is on the 1040.</p>

<p>I think how he got paid changed or the accountant used a different method.</p>

<p>Nothing you can do about it, so don't worry. You did exactly what you were supposed to.</p>

<p>No, this isn't correct as it sounds like you didn't enter the foreign income (which was excluded on the 1040) as untaxed income. Please refer to page 55 of the detailed FAFSA instructions here:</p>

<p><a href="http://studentaid.ed.gov/students/attachments/siteresources/2012-13CTF.pdf%5B/url%5D"&gt;http://studentaid.ed.gov/students/attachments/siteresources/2012-13CTF.pdf&lt;/a&gt;&lt;/p>

<p>I believe that "wages" are used only in the case when your parents do not file tax returns. Otherwise, FAFSA uses Adjusted Gross Income.</p>

<p>So in fact if your adjusted gross income legitimately came out to $1, then your EFC sounds correct, unless you have a lot of assets.</p>

<p>I don't think a FAFSA-only school can adjust it for Federal aid, whether they will make an adjustment for giving out their own money, who knows, you'd have to ask the school.</p>

<p>The wages field is used to calculate various allowances for the EFC formula (such as Social Security taxes). The AGI figure is added to the untaxed income number (which the OP seems to have missed on his FAFSA) and will increase the EFC.</p>

<p>In many cases, if you file a return with the IRS for a year in which foreign income was earned, a portion of the foreign income can be excluded on IRS Form 2555 for U.S. tax purposes. The figure reported on line 45 of Form 2555 (or line 18 of Form 2555EZ) should not be reported in Question 44(i)***** This is from the handbook. The foreign income exclusion amount is not reported on the FAFSA. Not sure why it isn't, but it isn't. If there was some foreign income not reported on Form 2555, that would be reported as untaxed income ... but if it was all reported on Form 2555, none is reported on the FAFSA.</p>