Hi I am trying to transfer out of a community college and I am applying for financial aid again. I used to get fafsa since it used to be my mom working and I had a part time job and we both made under $22,000. She is 63 now and I am turning 23 this year. I have a part time job now. But my old job is offering me to pay me in cash to help me out. But I just don’t want to go over the limit so I can still get fafsa. Our household is just 2. My mom and I.
FAFSA is the administration, or portal, through which you would submit your financial information so that institutions can determine what income/economic range you fall into when seeking to allot financial aid to you. FAFSA itself is not aid.
I cannot imagine that even earning money on the books would put you at a different financial level, where the determination for aid is concerned. You will probably be granted all sorts of institutional aid, as well as what exists for those in your state as based on income levels. Additionally, it sounds like you definitely qualify for Pell grant aid (does it cap? have you used it all?), and depending on where you transfer the college will set a package for you made of family contribution (I assume you declare yourself/but maybe your Mom does), grants (do not have to be paid back) and loans.
You should go see your counselor at your community college.
For the universities that you are considering transferring to, go to their web sites and search for the Net Price Calculator. Use it to get an estimate of financial aid at each school.
Generally, filling in the FAFSA form is needed to apply for financial aid. Some schools also require CSS Profile in addition (and if they do, and your father is alive, they will require his information).
I assume your concern is related to a Pell Grant?
http://ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf
You must include all monies earned whether paid in cash, check, direct deposit, whatever on the fafsa.
Same thing on your taxes!
Payment for earnings in cash does the opposite of helping you out. You still have to include it on your tax return and you will owe 15.3% self-employment tax on it which is addition to any income tax.
Even if you get paid in cash, you still have to declare that as income on the FAFSA. If your employer is paying you under the table, you need to know…he is doing this not legally. Employees are supposed to be paid, have taxes taken out…and have FICA taken out.
Of course, you can declare yourself as self employed, and file as such…but then you will be responsible for paying all the taxes, plus yours and your employers share of FICA.
Or were you planning to commit fraud by not declaring income on your taxes or financial aid forms?
In addition to the tax problems, if you are paid cash and no longer appear on the company payroll, you will no longer be covered for workman’s compensation if you have an injury on the job, and you will have difficulty verifying your income if you are laid off and need to file for unemployment compensation. Truly, there are no advantages to you in collecting your income in cash.
You are 23. Depending on how soon your birthday falls, and which academic year you need to file the FAFSA for, you will either be your mother’s dependent and her income will be what matters most for the FAFSA, or you will be independent and her income won’t matter at all. So when you run the Net Price Calculators, take a good look at whether or not there is a place for you to put in your birthdate or age.
Right now, I expect that you might have an automatic zero EFC based on your mom’s income which would mean that your income won’t matter at all. When you turn 24, you will be independent for the FAFSA and only your income will count.