I had the opportunity over the past three days to attend the EASFAA conference, and one of the best sessions I sat in on was on Demystifying Federal Methodology. The presenter explained this vital fact:

The income tax paid line on the FAFSA is the one most often done wrong, and when done wrong, it costs students and families money.

Most people put down their withholding amounts on the FAFSA, not the actual income tax paid.

Depending on how you have federal tax withholding set up, this could cost you financial aid!

So we’re going to change our advice here – instead of recommending that you do your taxes before filing your FAFSA, we’re now going to suggest that you MUST file your taxes first, to ensure as correct a FAFSA (and subsequent EFC) as possible.

Consult a qualified tax professional or a financial planner/CPA to have your taxes done (or redone) – and if you have already filed your FAFSA, do the EFC formula by hand or use the FAFSA Forecaster to see if filing a correction makes sense.

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