FAFSA deadlines can be very confusing for students and their parents. Many colleges and states have financial aid deadlines in January and February, but most of us have not filed our taxes by those deadlines. So, how do you fill out the FAFSA when it asks for tax information?
Unfortunately, many families wait to submit the FAFSA until after they have filed their taxes and miss the financial aid deadlines at colleges. By submitting the FAFSA and financial aid documents just one day late, students can miss out on many financial aid opportunities, including grants and scholarships that do not need to be paid back.
To ensure students meet the financial aid deadlines, it is acceptable to provide estimates on the FAFSA. Students and families can base their estimates on their last pay stub, W-2s and other tax documents. In addition, if income has stayed somewhat consistent over the years, families can use the previous year’s federal income tax returns to make estimates. If your income has changed, FAFSA provides an income estimator.
The most important thing to remember when providing estimates on the FAFSA is go back after taxes are filed and make the necessary changes. The Department of Education has made it simple by providing the IRS Data Retrieval Tool (DRT) to transfer tax information directly into the FAFSA. If families choose not to use the DRT, they can log back into the FAFSA and manually enter the correct information.
Therefore, keep these things in mind to ensure you get the best financial aid offers from colleges:
- Pay attention and meet the specific deadlines for each college, as well as state deadlines.
- If you will not be able to file your taxes before the deadlines, provide estimates on the FAFSA.
- After filing your taxes, return to the FAFSA to submit corrections.
Note: In future years (starting with the 2017-2018 FAFSA), the FAFSA will be made available earlier. For example, for the 2017-2018 academic year, the FAFSA will be available Oct. 1, 2016 and students and parents will use their 2015 tax information to fill out the FAFSA. Estimates should not be required in the future since the FAFSA will use the previous year’s tax information.