As of October 1st the Department of Education began accepting the Free Application for Federal Student Aid (FAFSA). This is important for those attending college next year or those with children who will be. The FAFSA must be filled out by anyone wishing to qualify for federal student aid (via loans or grants), state aid, and school scholarships. It’s also required for those wishing to qualify for subsidized and unsubsidized student loans as well as parent PLUS loans.
It’s a good strategy to submit the FAFSA as soon as possible because schools and states often award scholarships and grants on a first come, first serve basis. To fill out the FAFSA simply go to the website here https://studentaid.ed.gov/sa/fafsa. Sometimes it can be a daunting task to immediately provide all the answers required on the form which is why we’re happy to help our clients walk through this application process. If you desire help with submitting the FAFSA simply contact us to set up a time for you to come in and allow us the opportunity to walk through the submittal process with you.
Another strategy to keep in mind come tax season is to take advantage of either the American Opportunity education credit or the Lifetime Learning credit. These can credit you up to $2,000 or $2,500 on your returns if you meet the necessary qualifications. To learn more about these credits follow this link https://www.irs.gov/credits-deductions/individuals/education-credits-aotc-llc . Additionally, we recommend working with a professional tax preparer like us who is familiar with these strategies and can help you implement them correctly.
Finally, if you have children whose college careers are further on the horizon it’s a good strategy to set aside money for their education in an Education Savings Plan such as a Coverdell Education plan or a 529 Plan. These funds grow tax-free and can be withdrawn tax-free for qualifying education expenses.
Now is a great time to plan for one of the most expensive investments of your life: you and your family’s education.