College Loan Consolidation, Federal Loan Consolidation, Private Loan Consolidation, Student Loan Consolidation

America's Top Student Loan Consolidator




Veterans' Untaxed Incomes and Worksheet B of the FAFSA
By Surajit Sen Sharma
 
The W-2 statement often confuses veterans and leads to mistakes when filling out the FAFSA. Worksheet B of the FAFSA asks for the details of applicants' untaxed incomes. However, the same amount may also need to be reported as "earned income" elsewhere on the FAFSA. If the applicant has not filed tax returns, then figures that are present both on Worksheet B as well as under "earned income" can be doubly counted and lead to miscalculations of the applicant's need. This article tries to clear that confusion and provide guidance for reporting combat pay, subsistence, and other allowances like housing on the FAFSA.

Why combat pay needs special attention

Though combat pay does not fall within the applicable gross income of an applicant, it still requires attention for the following reasons:
  • It is taken into account when calculating need for the purpose of federal student aid.

  • It is counted as untaxed income on Worksheet B of the FAFSA when the applicant has filed his or her tax returns.

  • It should not be reported on Worksheet B if the applicant has not filed income tax returns—this will result in miscalculations.

  • It is required to be reported as "earned income" on the FAFSA.

  • The W-2 statement lists the amount of combat pay in Box 12 (Q) and, sometimes, in Box 14.
When filling out Worksheet B

When filling out Worksheet B of the FAFSA, it is important to keep in mind the following points:
  • Figures and amounts already included within the AGI should not be included again on Worksheet B. Doing so will lead to miscalculations which can affect the need that is calculated for the applicant.

  • Housing allowances (BAQ) and subsistence allowances (BAS) should be reported on Worksheet B of the FAFSA.

  • Check with school authorities when using your recent Leave and Earning Statement (LAS) to determine other types of untaxed income that you can include on Worksheet B.

  • Never report your SSA or Social Security Administration wages that are listed on the W-2 statement under code W.

  • Keep in mind that schools, under the HEROES Act, can exclude your untaxed earned income if it no longer reflects your income. Ask your school about any other privileges which you may be entitled to.
Why to be careful about Worksheet B

Income reported on Worksheet B is excluded from AGI. The less your AGI, the greater your chances for having a higher "need" and lower Expected Family Contribution (EFC). Ideally, you will be eligible for the simplified needs test or an automatic-zero EFC, allowing your entire education to be funded. If you need further explanation on issues regarding military pay, you can visit the MyPay website at mypay.dfas.mil/mypay.aspx.




 


Article Title : Veterans' Untaxed Incomes and Worksheet B of the FAFSA
Comment not found for this article.
 
Comment
 


+ Consolidate Your Private or Federal Student Loans Now!
(Save Thousands!!)


EdFed introduces… Awareness… Learnal
At, EdFed, we proudly introduce 'articles on student loans' and 'Learnal - the journal to learn from', our free newsletter on student loan management, which is sure to keep you informed of the latest events and happenings in the student loan market. To receive your copy of the above just use the RSS feed below and add this to your "My Yahoo", blogs, newstickers, and other similar channels accepting distributable content.
Click here to sign up for our Weekly Newswire now!

How EdFed Helped others!
Thanks for making everything so clear and easy during my consolidation.
- Mike T.  Denver, CO
* Your Name: * Your E-mail Address:

We respect your privacy.
* Your Friend's name: * Your Friend's E-mail address:
Include a Message:
+ Privacy Policy
CONSOLIDATION NEWS
Schools Will No Longer Receive Paper FAFSA Forms
(September 20, 2007)

news desk