School is out for the summer. No papers to worry about, no deadlines and no classes just months of sun and fun. Now if only that was how life really was. If you’re in college or are planning to attend one in the fall, you know that the learning process on how to pay for higher education never ends.
Most kids and their parents look into scholarships and other types of financial aid to cover the ever-growing cost of college. And the key paperwork necessary to determine how much college aid you can get is known as FAFSA, which is the acronym for the Free Application for Federal Student Aid.
FAFSA is the form used by the U.S. Department of Education to determine how much money a student or his/her family will be expected to contribute towards college. All federal grant and loan awards are determined by the FAFSA, and nearly all colleges and universities rely on the document to determine whether a student is eligible for the schools’ financial aid programs.
Like most government documents, it’s not easy to complete. To calculate your Expected Family Contribution, or EFC, you must provide data on income, assets and other household information. Once you have collected and given all the information it is then analyzed by a federal processor and the results are electronically transmitted to the financial aid offices of the schools that you list on your FAFSA.
Thankfully, the IRS has seen fit to make part of completing the form a bit easier. The Internal Revenue Service now offers FAFSA applicants online access to their income and other tax return information that’s required by the form.
With the FAFSA online tool, applicants can automatically transfer the required tax data onto the federal financial aid form. This can save you and your family some time in completing the FAFSA.
The automatic transfer of tax info also may reduce the likelihood that your FAFSA will be selected for verification. That could save you time and hassle. Many college and university financial aid administrators also are strongly encouraging applicants to use the IRS Data Retrieval Tool since it will reduce their workloads, too.
To use the IRS data retrieval tool for FAFSA purposes, you must have a valid Social Security Number and FAFSA personal identification number, or PIN. You’ll also need to authenticate yourself to the IRS.
Also, it is important to remember that students and parents must use the tool separately for their respective income tax returns.
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.