FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

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b0B
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FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Fri Oct 26, 2018 11:37 pm

What happens to the FAFSA Simplified Needs Test
http://www.finaid.org/educators/needs.phtml
now that (as of tax year 2018) forms 1040A and 1040EZ are gone? The SNT requires that you could have used one of these forms. Has anyone seen how the SNT rules will now be formulated?

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teen persuasion
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by teen persuasion » Sat Oct 27, 2018 6:24 am

Good question - I've found nothing so far.

Soon2BXProgrammer
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Soon2BXProgrammer » Sat Oct 27, 2018 8:47 am

b0B wrote:
Fri Oct 26, 2018 11:37 pm
What happens to the FAFSA Simplified Needs Test
http://www.finaid.org/educators/needs.phtml
now that (as of tax year 2018) forms 1040A and 1040EZ are gone? The SNT requires that you could have used one of these forms. Has anyone seen how the SNT rules will now be formulated?
joke: I suppose if the forms don't exist, then no one will qualify. accidental casualty of trumps new tax plan? you decide for yourself.

actually i'm interested in this discussion myself.. of course my children are young enough that it will probably all change again by then.

workerbeeengineer
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by workerbeeengineer » Sat Oct 27, 2018 9:41 am

Since FAFSA indicated that our EFC was larger than the cost of attendance at our child's chosen University, there was no aid awarded other than the offer to take out loans (student and parents). I'm sure whatever tweaks that were made to the FAFSA to account for the changes in the tax laws will still result in our EFC being higher than cost of attendance. Thank goodness for the 529 plan!

Soon2BXProgrammer
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Soon2BXProgrammer » Sat Oct 27, 2018 10:40 am

workerbeeengineer wrote:
Sat Oct 27, 2018 9:41 am
Since FAFSA indicated that our EFC was larger than the cost of attendance at our child's chosen University, there was no aid awarded other than the offer to take out loans (student and parents). I'm sure whatever tweaks that were made to the FAFSA to account for the changes in the tax laws will still result in our EFC being higher than cost of attendance. Thank goodness for the 529 plan!
just so you are aware.. the simplified means test allows you if you have a low enough income to ignore all assets. this means if you have 10M, but less than 50k of income, you could ignore the 10M for the purposes of financial aid. that is why i am interested in it. (and potentially the OP).

b0B
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Oct 27, 2018 12:47 pm

The rules are somewhat complex and seemingly arbitrary. Maybe it didn't start that way, but was caused by trying to conform the rules to other tax changes over time. So there's this list here
http://www.finaid.org/educators/needs.phtml
of many things that would force you to use form 1040 rather than 1040A and 1040EZ, thus disqualifying you for SNT (except for some other exceptions - yet more complexity). But once the distinction between the forms disappears, the items of the list in the link will seems even more arbitrary. If they keep that list, presumably by making it explicit, it will basically be a list frozen in place by historical accident. But making a blunder with this stuff can cost $k's so I can't ignore it if it has a chance of being relevant.

Our first FAFSA year is 2022 (oldest starts college in 2024) so I'm trying to plan. E.g. will I need to avoid needing sched D, HSA transactions etc.

clydewolf
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by clydewolf » Sat Oct 27, 2018 2:39 pm

Prior to 2018, every tax payer could use Form 1040. Both the 1040-A and 1040-EZ are simplified versions of the 1040. The simplified versions of the 1040 are gone. You will just have to use form 1040.

b0B
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Oct 27, 2018 3:36 pm

clydewolf wrote:
Sat Oct 27, 2018 2:39 pm
Prior to 2018, every tax payer could use Form 1040. Both the 1040-A and 1040-EZ are simplified versions of the 1040. The simplified versions of the 1040 are gone. You will just have to use form 1040.
And what are the implications for SNT?

mnnice
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by mnnice » Sat Oct 27, 2018 4:16 pm

b0B wrote:
Sat Oct 27, 2018 3:36 pm
clydewolf wrote:
Sat Oct 27, 2018 2:39 pm
Prior to 2018, every tax payer could use Form 1040. Both the 1040-A and 1040-EZ are simplified versions of the 1040. The simplified versions of the 1040 are gone. You will just have to use form 1040.
And what are the implications for SNT?
Maybe that you should apply for free or reduced lunch and not worry about tax forms :?

Your time horizon is still far enough away that lots of rules could change :wink:

Spirit Rider
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by Spirit Rider » Sat Oct 27, 2018 4:23 pm

b0B wrote:
Sat Oct 27, 2018 3:36 pm
And what are the implications for SNT?
That is the crux of the question without a current answer.

As alluded to, instead of a simple form determination, there will likely be an SNT exclusion list of lines on the new Form 1040 Schedules 1-6.

DIFAR31
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Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by DIFAR31 » Sat Oct 27, 2018 4:38 pm

b0B wrote:
Fri Oct 26, 2018 11:37 pm
What happens to the FAFSA Simplified Needs Test
http://www.finaid.org/educators/needs.phtml
now that (as of tax year 2018) forms 1040A and 1040EZ are gone? The SNT requires that you could have used one of these forms. Has anyone seen how the SNT rules will now be formulated?
This won't be a factor for students completing FAFSA until the FAFSA for the 2020-2021 academic year is released on October 1, 2019. The FAFSA folks will first need to see what kind of tax forms the IRS comes up with for tax year 2018, so there are several things that need to happen in sequence before your questions can be answered.

b0B
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Joined: Fri Oct 19, 2018 11:39 am

Re: FAFSA Simplified Needs Test now that forms 1040A and 1040EZ are gone

Post by b0B » Sat Oct 27, 2018 5:37 pm

Thanks everyone. It looks like the answers won't be known for a while. I'll wait and plan accordingly.

I have competing reasons for putting funds in tax-sheltered (I have plenty of space) or taxable (for access and flexibility), and all this FAFSA stuff is part of the calculation.

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