Interest Income

[nadalle]

<p>I am an U.S citizen from aboard so I am not very familiar with the terminology on the CSS Profile and the FAFSA.</p>

<p>I am a non-filer but I have a bank account that generates interest. Do I have to report the interest as a sort of “income” on the Profile or the FAFSA?</p>

<p>The following link: [What</a> Is Interest Income for a FAFSA? | eHow.com](<a href=“http://www.ehow.com/about_6464966_interest-income-fafsa_.html]What”>http://www.ehow.com/about_6464966_interest-income-fafsa_.html)
implies I won’t have to do that on the FAFSA, but is the same thing true for the Profile? If not, where will I include that “income”? Will is be counted as "any other untaxed income“？</p>

<p>I already submitted my CSS Profile so I hope I won’t have to contact all the colleges I applied to in order to update my file…</p>

[swimcatsmom]

<p>You do have to report interest income on FAFSA. That link seems to have a lot of misinformation in it. What it says about not reporting investment income is completely wrong as well (that also is reported as income).</p>

<p>From FAFSA instructions

35. Adjusted Gross Income. Provide your (and your spouse’s) adjusted gross income (AGI) for 2010. AGI is found on IRS Form 1040-line 37; 1040A-line 21; or 1040EZ-line 4. If you have not completed a 2010 tax form, you should calculate your AGI using the instructions for the applicable IRS form. You can get the instructions and the form at a public library or download them in Portable Document Format (PDF) from [Forms</a> and Publications](<a href=“http://www.irs.gov/formspubs/index.html]Forms”>http://www.irs.gov/formspubs/index.html).</p>

<p>Note: AGI includes more than just wages earned; for example, it also includes interest, dividends, alimony, taxable portions of Social Security, and business income.

The interest income you received during the year must be reported as income. The money in your bank account on the day you file FAFSA is reported as an asset. If any of the interest you earned is still sitting in the bank account then that is included in the asset you report.</p>

[nadalle]

<p>Thanks swimcatsmom. I am referring specifically about the interest that
sit in my bank account. Do I have to report those on the CSS Profile? Or do I just include them as assets?</p>

[sk8rmom]

<p>As swimcats said, the interest that you earned is income…whether it’s taxable or not. The total value of your account is an asset. This may or may not include the interest earnings, depending on whether you left it in the bank or withdrew it.</p>

[kelsmom]

<p>You would report it as other untaxed income. And yes, if it is still in the bank account, it is also an asset. Like life, the EFC formula is not always <em>fair.</em></p>

[nadalle]

<p>Ok. So on both the FAFSA and CSS Profile, I will have to include the interest I earn from my bank account as “untaxed income”?</p>

<p>If I have already submitted my Profile, do I have to email or call each college about it?</p>

[kelsmom]

<p>FAFSA can be updated online. Profile cannot be - you would contact each school to ask how they want you to provide the new information.</p>

[swimcatsmom]

<p>Kelsmom - did you see that link. It actually is telling people they don’t have to report interest or dividend income because it is included in the balance in their accounts. Really makes you realize how much misinformation there can be out there on the internet!</p>

[kelsmom]

<p>Yikes! </p>

<p>Of course, if the amount of interest income is high, it’s going to be included in AGI. If it’s low enough that it’s not reported on a tax return, it’s not going to make much difference in the EFC (but yes, it does have to be reported). For someone like the OP, who I am guessing may have a decent amount of interest income, it can make a difference.</p>