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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I have a complicated situation, & desperately need help. Ill

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I have a complicated situation, & desperately need help. I'll make it short & let you ask me for anything else you need to know.
I am a 51 yr. old female, unemployed, partially disabled but not on disability, nor will be applying. My husband passed last March after 12 years of battling cancer & many, many other health issues. He was a Federal employee, US Postal Service for 32 yrs. He left his job in 2001 due to injuries from his job, & was on Federal Workers Compensation (OWCP), Dept. Of Labor. We have one daughter in her 3rd year of college, & today, March 1, us the deadline for filing the FAFSA financial aid form. I don't know how to answer some questions due to all the changes because of my husband's death. We didn't have to file a tax return during these years because his compensation was tax-free. On the FAFSA we used his information, and my daughter has had scholarships & grants that covered the majority of her tuition. Last August, she received an anonymous scholarship in the amount of $15,000/yr, which is exactly the difference between her annual tuition & the amount of her financial aid pkg. Now her entire tuition is covered for 2013-2014.
I have to use my information now on the FAFSA, but am unemployed. However, now there are life insurance funds & Survivor's benefits that my daughter & I receive monthly from the Office of Personnel Mgmt. I have a booklet that explains the benefits & tax info, but its not clear to me. I've been through so much chronic stress taking care of my husband, along with 40 hospitalizations myself during these past 12 years, & am mentally drained from grief. I can't afford to make a mistake, & the FAFSA is asking for asset info. If I answer this, I will have to pay a portion of her tuition, which will take away from my income that I can't afford to lose. I am trying to recover from so much trauma plus now have new health problems. Can anyone help me?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

LEV :

Hi and welcome to Just Answer!
Sorry for your situation...
The issue is that FAFSA determination is only partially based on the information from your tax return.
There are other information you need to enter which is not from your tax return - for instance - if you receive income that is not taxable. Also you need to report your assets.
In additional - you provide your financial information and separately financial information for your daughter - means - her income - taxable and nontaxable and her assets.


If she did not file her tax return and was not required to file - she should check the box "I'm not going to file" on FAFSA application form, line 32 - see page 4 - http://www.fafsa.ed.gov/fotw1112/pdf/PdfFafsa11-12.pdf . If she file online - there should be a corresponding item.

LEV :

Please be aware that when you entered information about your financial situation - that information should be based on the date FAFSA application is submitted. Thus if you file FAFSA today - you need to report all assets you own today.
Please see for reference - page 12 - http://www.ifap.ed.gov/sfahandbooks/attachments/0102AVGCh2appquestions.pdf .
An asset is defined as property that is owned by the family and has an exchange value.
So - if you are a legal owner of the asset - it should be reported

LEV :

Eligibility for financial aid is based on so-called "expected family contribution" (EFC). An EFC is a measure of how much money you will be able to contribute toward your daughter's educational expenses.
The US Department of Education calculates your official EFC after the Free Application for Federal Student Aid (FAFSA) is submitted.
However - before submitting the application - you may verify how certain items could affect your EFC - for that you may simply use an online calculator.
For instance - http://www.aie.org/managing-your-money/finance-tools/efc_calculator/
You will use the same information as for FAFSA.

Customer:

thank you for responding so quickly. Do I have to put life insurance proceeds as an asset? I can't lose that money.

LEV :

Yes - the life insurance due to you is your asset.

Customer:

Thank you, XXXXX XXXXX it, & was aware of several things you advised, but since this past year changed our finances so much, I was worried. Turns out that I qualified as a "dislocated worker". & didn't have to put financial info in. Hopefully it will work out, I appreciate you so much!

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22965
Experience: Taxes, Immigration, Labor Relations
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Lev
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Taxes, Immigration, Labor Relations