Taxes & Financial Aid – How To Stay Organized

A few years ago, the whole financial aid system was changed to allow families to submit financial aid forms to colleges even earlier, and with their most updated filed taxes. Feeling better yet?

You are not alone if you’re confused about which year’s taxes and income information to submit for the current ‘aid year’.  The good news is, this system was set up to actually help families complete the financial aid process more efficiently.

A few years ago, the whole financial aid system was changed to allow families to submit financial aid forms to colleges even earlier, and with their most updated filed taxes. Feeling better yet?

However, this is only ideal if you start submitting all of your paperwork in October or November as soon as those forms come available. But if you find yourself submitting in January, or even June the next year, (and we’ll be honest, it can be confusing any time of year), it may feel like you need a mathematics degree to try and figure out what exactly you’re applying for.

To sum it up, you will be submitting financial aid paperwork a year in advance, but with filed tax numbers for 2 years prior to that school year for which you apply. Who can keep track of that?

For a better visual, I have included a chart below that breaks down each financial aid year with its corresponding tax year:

What most families don’t know is that any given current financial aid-year, meaning the year for which your student will be attending college and you want to receive funds (and that you will submit paperwork for) begins on July 1st and ends the following calendar year on June 30th. This was set up and is maintained by the U.S. Department of Education (this is the department that also controls the FAFSA).

What’s great about the new system is that it allows plenty of extra filing time for those that may be procrastinators when it comes to financial aid paperwork. It also allows you to submit tax information from taxes that have already been filed (even if you file an extension), so there is less estimating, or re-doing paperwork to submit final numbers.

Be aware, though, that many colleges have their own priority deadlines, so it’s in your best interest to submit financial aid paperwork on time. Colleges may also require additional tax or income information from your family throughout the process. Always be sure to check the individual college website for further notices and details!

Until Next Time!

Hope Santos, College Dream Builder Financial Aid Consultant

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