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FAFSA and Taxes: What you need to know

FAFSA

What is FAFSA?

FAFSA, short for Free Application for Federal Student Aid, is a crucial form that students complete to access financial aid for their education. This aid can come in the form of grants, scholarships, work-study programs, and federal student loans. FAFSA plays an important role in making higher education financially feasible for millions of students.

Can you get FAFSA if you owe tax?

The answer is, YES. Failing to file a required federal income tax return, on the other hand, will prevent you from receiving federal student aid. The Free Application for Federal Student Aid requires income and tax information from the prior year. Most applicants should have already filed a tax return for this year by the time they file the FAFSA.

The Impact of Owing Taxes on FAFSA

1. Completing FAFSA

When you fill out your FAFSA form, you’ll need to provide information about your income and assets. If you owe taxes, it’s important to be honest and accurate in reporting this information.

Here is the type of tax return information required:

  • Social Security Number 
  • Filing status (for you/your parents)
  • The type of tax form you filed (ex. Form 1040)
  • Adjusted Gross Income amount for that year
  • Wages income, cash, savings account amounts
  • Education credits received, child support
  • Untaxed income for that year (ex. tax exempt interest)
  • Income tax owed
  • Student aid (ex. taxable grants/scholarships and education credits)

2. Impact on Federal Aid

Owing taxes won’t automatically disqualify you from receiving federal aid. However, it can affect your Expected Family Contribution (EFC), which is used to determine your eligibility for need-based aid. A higher EFC could mean receiving less aid.

3. Priority Tax to the rescue

Here’s where Priority Tax Relief can help you! If you’re dealing with tax debt that’s affecting your FAFSA eligibility, our team of experts can help you explore tax relief options. We’ll work to resolve your tax issues and ensure you’re in the best possible position to secure financial aid for your education.

You can get a FAFSA even if you owe taxes. It’s essential to be honest when reporting your financial information on your FAFSA form. If tax debt is impacting your eligibility, you don’t have to worry because Priority Tax Relief has your back. We’re here to assist you in resolving your tax matters so that you can focus on pursuing your educational dreams without financial roadblocks.

Remember, education is a powerful tool, and with the right financial support and expert guidance, you can achieve your goals.

Ready to learn more about how Priority Tax Relief can help you with tax debt? Visit our website for more information: Priority Tax Relief

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FAQs

 The simple answer is no. A business and a person are completely separate, thus, any personal tax debts or liabilities should not affect your business.

Tax debt can be an exhausting and complicated thing to deal with on your own. Communicating with the IRS and professionally handling your tax liabilities are just two of the services companies like Priority Tax Relief can offer.

No. The IRS’s Innocent Spouse Relief protects you from paying these additional taxes. However, this does not relieve you from household employment taxes, business taxes, individual joint responsibility payments etc. Priority Tax Relief helps you learn more about innocent spouse relief.

The most popular option to date would be an Offer In Compromise (OIC). At Priority Tax Relief, we help tax relief help become more accessible to taxpayers in need and help them understand how they can qualify for these options.

IRS tax liens are legal claims on your property when you do not settle your tax debts. The IRS usually sends out a notice when no payment has been made after a liability assessment. Find out more about tax liens with Priority Tax Relief.

Yes. Not only can the IRS put a claim on all your current property, tax liens can also affect any property or intangible or tangible assets that you obtain in the future. At Priority Tax Relief, we help you understand federal tax liens and how to communicate with the IRS.

 

Tax levies are the actual seizure of your property and are different from legal claims or tax liens. Settle your taxes before the IRS sends out a notice. Priority Tax Relief helps you understand tax levies and how you can avoid them.

Yes. Not only can they seize physical property but they can also legally take hold of the money in your bank account and other wages. To avoid this from happening, contact Priority Tax Relief now.

Your debt will, unfortunately, continue to grow and you will possibly lose a great number of your assets. It is definitely a scenario we do not wish to see happen to anyone, that’s why Priority Tax Relief makes sure that our help becomes within reach.

Need expert help? Looking to get back on track?