It's FAFSA Time
TaxACT Deluxe Makes Completing The Free Application for Federal Student Aid Easier.
December 18, 2006
Cedar Rapids, Iowa — 2nd Story Software, Inc., developers of what critics and users alike denote as being America's #1 value-priced income tax preparation software, announces TaxACT® 2006 Deluxe makes preparing the Free Application for Federal Student Aid (FAFSA) easier for the 2007-2008 school year with its new College Student Financial Aid Worksheet.
The FAFSA (The Free Application for Federal Student Aid) is an extremely critical financial aid form which all students requesting federal financial aid must file. Much like filling out a bank loan application, the FAFSA qualifies how much federal aid a student is eligible to receive (in the form of grants or loans) based on U.S. Department of Education guidelines — including information such as your family's assets and previous year income.
“Although it is easier to file the financial aid application once parents have completed their taxes, the FAFSA can be filed using the best estimate of your prior year income. Applicants will have the chance to update the information they initially provided at a later date,” says Stephanie Behrends, spokesperson for 2nd Story Software, Inc.
Behrends continues, “Certainly, the state in which a student resides, choice of school and academic standing are components which contribute to the total amount of aid a student will receive in the form of scholarships, grants and loans. However, it is crucial for students to understand the chances of receiving federal aid are directly related to filing the FAFSA on time and the financial strength of their family, which is calculated by using the information supplied on the application”
The FAFSA measures your family's expected contribution toward the cost of your education. For that reason, cash assets and having high adjusted gross income (AGI) will greatly diminish the amount of assistance a student can receive. Nevertheless, a bit of planning prior to preparing the FAFSA can help you save thousands of dollars toward the cost of a college or technical education.
Depending on the availability of funds, students can receive up to the difference of what it costs to attend college and what a family can contribute toward the cost of that student's education. If you are a student (or the parent of a student) seeking to maximize your chances of receiving federal aid, be vigilant by using the resources available to you, which can help you to strategize and meet deadlines.
Behrends suggests, “Early tax preparation offers FAFSA filers a distinct opportunity to coordinate the lion's share of financial information required by applicants. Tax software, like TaxACT Deluxe which contains a College Student Financial Aid Worksheet, is a valuable resource that can help students and parents of students to take full advantage of various tax credits, deductions and strategies which can reduce income you report to the IRS taxes”
While any decision should be made with your personal attorney or accountant, some of the more worthy strategies FAFSA filers should investigate to reduce cash assets and lower reported income include:
- Maximizing contributions to retirement savings accounts such as to your IRA and / or 401(k).
- Prepaying state taxes that are owned prior to the end of the year. TaxACT Preview Deluxe includes a new All-State Tax Planner that forecasts your state income tax amount that may be due or is owed to you. Paying a due amount by December 31 will reduce your cash assets and entitle you to an additional deduction on your 2006 federal tax return.
- Making charitable donations. Reduces liquid assets.
- Contributing to a Health and Dependent Savings account (flex spending). Flex spending contributions are deducted from your gross income — greatly reducing the amount of income you report to the IRS.
- Making purchases before the end of the year.Make a qualified energy efficiency improvement to your primary residence by December 31. You'll reduce the amount of cash you have on hand and, under the Energy Policy Act of 2005, you may get a tidy tax credit worth up to $500.
- Paying off / down loans. Making an extra payment toward the principle amount of your home loan. You'll pay less interest and build a nest egg in the form of home equity.
- Paying off bills. Paying for services upfront reduces cash assets and may entitle you to a discount. For example, many customers receive rebates from their automotive insurance provider by paying for the year in full.
- Sell bad investments by December 31. You can deduct up to a $3,000 capital loss ($1,500 if you are married and file a separate return) to offset capital gains.
This is not intended as legal advice, but merely a checklist that you may wish to run by your lawyer or accountant. Also, funding is on a first come, first served basis. File your FAFSA the second you are eligible — the first minute of New Year's Day — January 1. Not only will you increase your odds of getting federal aid, you may actually receive more financial assistance because the money pool has not been diminished. However, be forewarned, if you attempt to submit before January 1, the application will not be processed.
You can file the FAFSA on the Web or by submitting the paper application via the mail. If you go through http://www.fafsa.ed.gov/, there is no charge for submitting the form electronically. The method you choose for submitting the form does not affect your eligibility for certain types of funding. However, applicants should consider electronic submission as it provides for faster delivery.
TaxACT Platforms and Pricing
Guaranteed 100% Accurate, TaxACT 2006 Standard takes affordability to a new level by allowing all American taxpayers to prepare, print, and e-file a federal return completely free-of-charge at www.TaxACT.com. The only comprehensive free offer of its kind, TaxACT Standard includes the forms, schedules and worksheets filers need to prepare 1040, 1040A and 1040 EZ Individual Income Tax Returns. With its user-friendly, interview-like format, TaxACT is designed to make tax preparation fast, easy and reliable by providing extensive reference tools and automatic alerts that meticulously inspects returns for errors, incomplete information and omissions.
TaxACT Deluxe provides do-it-yourself preparers in-depth advice and tax tips. Deluxe users benefit from features such as J.K. Lasser's Your Income Tax, advanced calculators, a more robust help / alert system, and extra convenience features (GainsKeeper, prior-year TaxACT return data import, and Fast-Form import). Better still, all Deluxe platforms include one (1) free federal e-file. Deluxe Online is just $9.95; or, for those that prefer to download the software version, the Deluxe Desktop Edition is $12.95 and includes the ability to prepare and print an unlimited number of returns.
TaxACT's best value, the Ultimate Bundle, combines TaxACT Deluxe and one State Edition for one low price. The Ultimate Bundle for desktop customers is $19.95, and for Online customers the cost is just $15.95.
TaxACT State Editions are available for all states that assess a state tax.
About TaxACT
After nearly a decade, TaxACTOnline.com has emerged as the 2nd highest trafficked online destination for tax preparation services.1 Deemed by critics and users as being America's No. 1 value-leader in tax-preparation software, TaxACT is a leader and pioneer of completely free tax-preparation software and online services. Designed to make preparing taxes electronically possible for everyone for little to no-cost, TaxACT is the only product to offer free electronic tax preparation, printing and electronic filing services directly to all American taxpayers.
About 2nd Story Software, Inc.
2nd Story Software, a privately-held company founded in 1998, is critically acclaimed as bein a leader in developing and marketing affordable tax-preparation software and Web-based services directly to consumers. To date, the comprehensive suite of TaxACT products have enabled more than 23 million consumer returns to be filed; and, continues to empower its users to devise well-informed tax strategies with ease, while looking out for the cost-conscious. More information regarding 2nd Story and the TaxACT product line may be found by visiting www.TaxACT.com.
Source: TaxAct.com
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