If you are a college student or the parent of one, you are probably familiar with the Free Application for Federal Student Aid, commonly known as FAFSA. It is a long, tedious document to complete. Officially, it is supposed to take about 30 minutes to complete, but that time can expand significantly if you need to collect the information.
The FAFSA has traditionally been accepted after January 1 for the upcoming academic year, and many financial awards are made on a first-come, first-served basis. Since the form utilizes information from your tax return, the FAFSA creates an urgency to complete and file your taxes early. Thanks to some changes at the Department of Education, some of that urgency has been reduced or eliminated. Effective for academic years beginning July 1, 2017, the FAFSA may be submitted as early as October 1, 2016. Instead of utilizing tax return information for 2016, the application seeks information from your 2015 return, which, presumably has already been filed. In this transition year you will need to submit your tax return information twice – for the 2016-17 academic year and the 2017-2018 year. The information submitted for the current year will not automatically carry over to next year’s application.
Even though the application can be long and tedious, there are a couple of tools available that will assist you in preparing the FAFSA. Many tax return programs will generate a FAFSA worksheet which guides you in the completion of the form. Look for the FAFSA Worksheet on your program or ask your tax preparer to generate one for you.
Also, the IRS has a “Data Retrieval Tool for FAFSA.” This will transfer your tax information from the tax return to the FAFSA application. If you e-filed the return the data should be available in two weeks. If not, it will take 6-8 weeks before you can access the information