FAFSA Gambling Income Question

[dothesafetydanc]

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My question is regarding the parent's adjusted gross income portion of the FAFSA.

On the 1040, it includes gambling income for the AGI. However, the gambling winnings(about 15k), very soon became gambling losses, and were itemized in the deduction portion of the 1040.

My question: considering that the gambling income did not actually last long enough to pay bills or improve standard of life in any way, should I include it in the AGI portion of the FAFSA?

 

[TMP-SMX]

http://www.irs.gov/newsroom/article/0,,id=172190,00.html

If your parents itemize deductions, the losses should already be deducted from the AGI. Therefore, it should have been a net of 0 on the AGI anyway.

 

[Sol Rosenberg]

http://www.irs.gov/newsroom/article/0,,id=172190,00.html

If your parents itemize deductions, the losses should already be deducted from the AGI. Therefore, it should have been a net of 0 on the AGI anyway.

Incorrect. Itemized Deductions are "below the line" (i.e. subtracted after AGI is calculated. Thus the AGI reported on the FAFSA will be inflated by the gambling winnings that are later offset.) Good question OP, sorry that I can't give you anymore advice....

 

[TMP-SMX]

Incorrect. Itemized Deductions are "below the line" (i.e. subtracted after AGI is calculated. Thus the AGI reported on the FAFSA will be inflated by the gambling winnings that are later offset.) Good question OP, sorry that I can't give you anymore advice....

Shows how much I know. 😉

 

[dothesafetydanc]

Thanks for the information guys. I spoke to someone connected to the Fin-aid office at my school, and she said that lottery\gambling winnings aren't considered as part of AGI.

However, on my parent's 1040, it happens to be included. Would I be committing some sort of crime if I were to just report the AGI minus the winnings?

 

[AMDFAO]

Your parents AGI is what it is and includes the amount of gambling winnings less any losses for the calendar year. I'm not sure why your school said it's not included...
Anyway, if you report your AGI less the income it will be off from what they reported to the IRS. If the school collects supporting docs to verify your parents info (copies of their taxes), they'll most likely go ahead and correct it to the actual AGI. What you may want to do instead is report the actual and then request the school consider adjusting the AGI themselves based on the fact it the gambling winnings were not an on going source of income. Besides, it's not likely that you would "accidently" mis-report an AGI since there isn't any wiggle room in interpreting the question. Report actual; let the school adjust.

 

[TMP-SMX]

Is the 15k going to make a difference in the AGI? For my school at least, unless the parental plus your EFC is under 18k you aren't going to get need based aid like Perkins loans or scholarships.

Run a calculator and figure it out. It is included in the AGI as said previously so you don't have a choice.

 

[dothesafetydanc]

Well the calculator I ran estimated my EFC to be around 860 or 3600 dollars, depending on if I included or did not include winnings.

Meh, but if you're talking about yearly cost for some schools, 1.8k won't make much of a difference I guess.

Well okay, thanks for all the information.

 

[TMP-SMX]

Well the calculator I ran estimated my EFC to be around 860 or 3600 dollars, depending on if I included or did not include winnings.

Meh, but if you're talking about yearly cost for some schools, 1.8k won't make much of a difference I guess.

Well okay, thanks for all the information.

For need based aid you need to include parental information too in the EFC calculation. The way EFC works is that you can get the full amount pretty much no matter what of stafford sub and unsub loans. The question is whether or not you are eligible for need-based loans.

You may be thinking about Cost of Attendance, which is usually going to be roughly 40k depending where you will be living and the tuition.

 

[dothesafetydanc]

That EFC figure is with parental information included 😳 . Well a single parent, the other cannot be expected to contribute in any way.

Could you suggest some undergraduate schools that take transfer students from two year colleges and would provide a good sum of institutional aid( that is, aid that is individual to the school)?

The university closest to me costs around 21,000 dollars yearly if I live thriftily, but I estimate the amount of aid they would provide to be less than half. Which wouldn't be horrible, I could take loans out here and there to make up the difference. But some other estimators I've used on more expensive schools provide up to 4\5th of attendance costs, which would equal to me paying 8-9k personally (not including scholarships). I could make that up easily, and I assume it would be a better quality of education.

 

[TMP-SMX]

I was talking about med schools with those numbers. As an undergrad your EFC will include your parents for all aid. Only advice I can give is to go to the least expensive school possible, work, and get federal loans. As for what undergrad school you go to, it doesn't really matter. As long as you study hard, volunteer, get good grades, and do well on the MCAT you would have a good shot at your state schools when you apply though there are never guarantees. (I'm assuming the pre-health means pre-med. Correct me if I'm wrong).