Attention class, here's you latest assignment.
Wait. Didn't the school year just finish?
Yes, for younger students. But those looking for financial help as they head off to college need to do some homework now.
Students, or their parents, who are seeking financial assistance to meet higher education costs need to file a Free Application for Federal Student Aid (FAFSA).
That deadline is this approaching June 30th for monetary help in making it through the 2018-2019 academic year. If you're thinking ahead, the FAFSA due date for the 2019-2020 higher education classes is June 30, 2020.
The good news is that whatever time frame you're working on, you can use the Internal Revenue Service's online option to get the tax information necessary to help you complete the FAFSA document.
Online data retrieval for FAFSA: The IRS Data Retrieval Tool (DRT) is the fastest, most accurate way to input tax return information into the FAFSA form.
It's been available since 2012 (with a break in 2017 after some hackers may have managed to get a look at 100,000 tax accounts), making getting income information easier for students and their parents who are seeking college financial help.
The IRS' online option allows folks filing FAFSA to get the necessary family earnings data and have it automatically entered on the application.
The DRT's value is not just the IRS' assessment. It's also what the U.S. Department of Education recommends.
FAFSA's full of tax and other questions: The FAFSA asks a variety of questions about you, as well as about your, and your family's, financial and, yes, tax situations.
Depending on your circumstances, you'll need some or all of the following information or documents to complete the application:
- Your Social Security number
- Your parents' Social Security numbers if you are a dependent student
- Your driver's license number if you have one
- Your Alien Registration number if you are not a U.S. citizen
- Federal tax information or tax returns, including IRS W-2 information, for you (and your spouse, if you are married), and for your parents if you are a dependent student. Potential forms needed to provide the info include:
- 1040, 1040A or 1040EZ
- Foreign tax return
- Tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia or Palau
- Records of your untaxed income, such as child support received, interest income, and veterans noneducation benefits, for you and for your parents if you are a dependent student
- Information on cash; savings and checking account balances; investments, including stocks and bonds and real estate (but not including the home in which you live); and business and farm assets for you, and for your parents if you are a dependent student
Getting the tax answers: If you're filing a FAFSA for the 2019-2020 class year, you must use data from your 2017 tax return to complete it. That explains the reference above to the three Form 1040 options.
Those tax returns were in use until the 2018 tax year. That's when changes under the Tax Cuts and Jobs Act prompted the IRS to create just one Form 1040 with assorted schedules. Note that change for future FAFSA filings.
If you didn't keep a copy of the return you need to fill out your FAFSA, IRS electronic options can help.
You can use the agency's Get Transcript Online to download this information.
Transcript info, access: A tax transcript is a computer printout that shows most of the line items found on your tax return when you filed it, including any accompanying forms and schedules.
When it comes to verifying income, a transcript often is an acceptable substitute for a copy of your original tax return.
However, any changes made after the return was filed will not be reflected on a basic transcript. For that you need a tax account transcript.
A tax account transcript will provide any adjustments you or the IRS made after you filed your return. Like the basic tax transcript, the tax account transcript also shows things such as your marital status, type of return filed, adjusted gross income and taxable income.
These two options, as well as the other types of tax transcript types are available online via Get Transcript.
Other tax data recovery options: You also can call the IRS' automated line toll-free line (800) 908-9946 to order a transcript by mail. Of if you have computer access, use Get Transcript by Mail.
In these cases, the IRS will mail your requested transcript to the address on your return within five to 10 days. Obviously, if you're facing an immediate FAFSA or other deadline, this won't work.
If you used tax software to prepare and file your 2017 return, you may be able to access your account to download and print a copy.
Did you hire a tax preparer to file your 2017 return? That tax professional will have a copy. Give him or her a call.
Note, too, that if you filed an amended 2017 tax year return, use the data on that Form 1040X.
Yes, it takes some work to get your tax data and other material together to apply for financial aid. But with the cost of higher education, it's an assignment worth completing fully and on time.
You also might find these items of interest:
- Tax breaks can help pay many college costs
- Students face unexpected tax hike on scholarship money
- Make paying for college a family affair, with contributions from parents, kids and Uncle Sam