Are you filling out a financial aid application? Did you know that you would require tax information to complete the Free Application for Federal Student Aid Form (FAFSA)? There is no need to panic if you didn’t or don’t have your tax transcripts handy.
By using the IRS Data Retrieval Tool, you can gain access to relevant tax information for filling out your 2019–2020 FAFSA form. The IRS DRT is the fastest and most accurate way to get your tax information readily available to complete your financial aid application.
If you are eligible to use the IRS Data Retrieval Tool, then you can access it from within the FAFSA form while filling it.
The following article will take you on a walkthrough of the tax information requirements and the key highlights while filling the FAFSA form.
Points to keep in mind
1. If you are filling out your 2019–2020 FAFSA form, then you would be required to use data from your or your parent’s 2017 tax returns.
2. A point to always keep in mind is you shall always keep a copy of your tax returns handy, either in paper or electronically, in a secure place. There are various software available where you can save your tax data and retrieve it as and when required, and in a safe manner.
3. The IRS Data Retrieval Tool will not be available on 14th July 2019 (Sunday) from 1:30 PM to 4:00 PM, and on 21st July 2019 (Sunday) from 12:30 AM to 5:00 AM Eastern time. You can still fill out the FAFSA Form by entering the necessary tax information manually.
4. If you are an Apple device user, then you may encounter errors while filling out the FAFSA form. Such errors occur if the device’s ‘Smart Punctuation’ feature is enabled, which converts the apostrophes and quotation marks into invalid characters which are not recognized by the FAFSA form. So, before starting to fill the form using your Apple device, ensure to turn this feature off.
5. If you use IOS or Android, then you can also check out the myStudentAid App and avail its exciting features.
Don’t have a copy of your 2017 tax returns? Don’t worry, read on to know your options
1. You may access the tax software product through which you or your tax prepper prepared and filed your 2017 returns. This way, you may be able to access the account to download and print a copy of your returns.
2. Or, you may contact the tax preparer who filed your 2017 tax returns to gain access to your tax data.
3. You can download your tax transcript by using the Get Transcript Online feature on the IRS website or the IRS2Go App.
4. You can get your tax transcript mailed at your address by using the Get Transcript by Mail feature on the IRS website or the IRS2Go App. Expect to receive your transcript within 5–10 days of such application on the address mentioned on your tax return.
5. Or, to receive your tax transcript by mail, you also have the option to call at 800–908–9946 to order the same.
6. If you had filed for an amended return in 2017 (Form 1040-X), then you would be required to use the adjusted gross income and earned income listed on your revised tax return.
Know about the alternative documentation for IDR Application
1. If you are an IRS Data Retrieval Plan applicant, then would be required to submit the alternative documentation of income.
2. You would be required to submit this documentation to the federal loan servicers after the completion and submission of the IDR application.
3. The process to be followed for submitting the alternative documentation of income will be explained to you as a part of the IDR application process.
4. Copies of stubs or most recently filed tax returns are usually included in the alternative documentation of income.
Tax benefits on education loans
You can make the most of the tax benefits provided by the IRS on the amount spent on tuition or education loan interest, to reduce your tax liabilities and get a tax break. A few highlights are as follows: –
1.The American Opportunity Credit: This type of tax credit will help you claim $2500 per year for four years of school.
2. The Lifetime Learning Credit: This type of tax credit will help you to claim $2000 per year for any college or career school tuition fee, books, supplies, equipment etc. which you had to purchase as a requirement of the course from your school.
3. Student Loan Interest Deduction: You can claim a minimum tax deduction of $2500 a year on the interest paid on student loans. Such loans include student loan taken for your spouse or your dependent.
You can estimate the amount of financial aid by using the FAFSA4caster.
If you are planning for your education or the education of your spouse or dependent and wish to know your eligibility for federal student aid, then you may use the eligibility estimator — FAFSA4caster to get an early estimate and plan the financials of your education early. You would be required to fill and submit the FAFSA form along with necessary tax details ones you make up your mind to apply for financial assistance.
Since the third-party mailing of tax transcripts has been stopped by the IRS to avoid tax frauds, it has become imperative to keep your tax data and transcripts handy and in a secure manner. The application for any financial assistance requires various tax compliances and data, which makes it very important to be updated with the latest tax news and procedures. If you are planning to apply for financial assistance for your education and require some expert tax advice to make the most of the financial aid, then do contact the experts from MyTaxFiler.com to make smart tax decisions.