What would consider me as an independent if I file for FAFSA?

Question

This is my first time filing for FAFSA. I just turned 25 and I'm trying to get federal funding to assist me with tuition fees. I was hired as an independent contractor in 2006 for a couple of freelance jobs. My employer did not deduct any taxes from my paycheck. I made about 6,000 and didn't file for 2006. I'm not sure if it's legal or safe to put down estimate of what I made in '06 in my FAFSA form and correct my SAR later. So, my question is, is there any way I can claim dependent and file with my parent's tax return instead?

Answer 1

First, if you earned $6,000 from self-employment in 2006 and didn't file you're in for a rude surprise sometime in the next few weeks or months. You WERE required to file since the requirement for self-employment income is only $400. The SE tax alone is around $900. And if you were claimed as a dependent by your parents last year you'd owe a bit of income tax on top of that. The penalties and interest will add about 40% to that if you get off your duff and file immediately. If you don't, the IRS will come looking for you as they probably know about the income via the Forms 1099 that were prepared by the companies that paid you.

As to the dependent vs independent rules for financial aid, ask at the financial aid office. You may or may not be independent for aid purposes even if you are independent for tax purposes.

Answer 2

1. Go do your taxes. Be prepared to add 50% for penalties and interest.

2. After you do your taxes, then put down the amounts shown on the 1040 form. Do not guess (FASFA is really good at picking out errors).

3. You are too old to be a dependent. You were 24 at the end of last year and made $6000--the limit was $3300.

Answer 3

You were required to file if you had self-employment income of over $400, so you need to do that. You'll owe penalties for being late on the filing.

And even if you were a dependent of your parents, which you are NOT by IRS rules, the amount you made is YOUR income and you couldn't just file it with theirs, you have to file your own return.

Now let me get this straight - you haven't paid the taxes that you owe on your income, but you expect the OTHER taxpayers to pay for your college. Does that sound reasonable?