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Filing Your Taxes And Preparing Your FAFSA

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United States tax form with pencil, calculator and glassesBy Robert Farrington
Contributor to Forbes

The start of tax season also brings about the start of another important document filing season – the FAFSA, or Free Application for Federal Student Aid. If you’re planning on taking classes this fall (whether you’re a new student just graduating high school or a returning college student), you need to file the FAFSA this spring. And since the FAFSA uses a lot of information from your tax return (and your parents’ tax returns), filing them both around the same time makes a lot of sense.

Even if you owe taxes, and don’t plan on paying your tax due until April 15, you can still file your FAFSA using the numbers on the return you completed. As long as they match, you will be fine. So, even if you delay in filing your tax return, you should still prepare your taxes early.

Why Filing The FAFSA Early Is Important

Filing your FAFSA early is extremely important. Many state and college financial aid awards are based on a first-come, first-served system. In order to qualify for these awards, you have to show proof of eligibility, which is done by using your FAFSA. If you file your form too late, you could simply miss out on receiving financial aid because the funds were already depleted. That’s why it’s essential to file your FAFSA early.

You can go to FAFSA.ed.gov and view deadlines by state. When browsing through the states, a prime example of the need to file early is Illinois. They post their deadline as “As soon as possible after January 1, 2015. Awards made until funds are depleted.” If you file your FAFSA too late, you could miss out on financial aid.

Why You Should File Your FAFSA Regardless

Even if you don’t think you’ll need financial aid, you should file your FAFSA every year you plan on attending school.

First, you may qualify for need-based financial aid that you don’t have to repay – and there is never a reason to turn down free money.

Second, your FAFSA application is also what qualifies you for federal student loans. Even if you weren’t planning on taking on student loans, your financial situation may change between now and when you start school. It’s always good to keep your options open when it comes to financing your college education. Even if you don’t take out any federal student loans, at least you have the option available. If you fail to file your FAFSA, you won’t have that option easily available.

Tips And Tricks For FAFSA Filing

Since taxes and FAFSA go together, it can be pretty confusing to file. Most people plan on filing their FAFSA electronically at FAFSA.ed.gov, which is typically the best way to go.

This year, the IRS and the Department of Education announced a new tool to make filing your FAFSA easier – the IRS Data Retrieval Tool (DRT). With this tool, you can automatically pull in all of the required tax information into your online FAFSA application. This can save time, and it can also help if your FAFSA application is pulled for review (which happens for a percentage of filers every year).

However, if you haven’t filed your taxes yet before filing your FAFSA, you need to manually key all of your information into the FAFSA application. This year, some tax-filing companies are trying to make it easier. TurboTax created a product called TurboTax for Students, which creates a FAFSA dashboard at the end of your tax return that can make finding all of the important data easier.

If you haven’t filed your return and file your FAFSA, it’s important to note that some colleges will still require you to verify your income before proceeding with any financial aid awards. So, it’s still always a good idea to file your taxes as soon as possible when also filing a FAFSA.

 

This article was written by Robert Farrington from Forbes and was legally licensed through the NewsCred publisher network.

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