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YOU CAN CLAIM A DEDUCTION IF …

Generally, you can claim the deduction if all of the following requirements are met:

•Your filing status is any filing status except married filing separately.

•No one else is claiming an exemption for you on his or her tax return.

•You are legally obligated to pay interest on a qualified student loan.

•You paid interest on a qualified student loan.

Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c.

www.irs.gov

WHAT YOU NEED TO KNOW

Department of Revenue and Taxation officials offered the following information on what tax payers need to know about this year’s tax season. If you have tax questions you’d like answered, email them to news@guampdn.com.

•Employers should have distributed W2s to employees by Jan. 31. Failure to meet that deadline could mean a fine. If you haven’t received your W2, ask your supervisor or your company’s accounting office when you can get it. Some employers may have mailed the documents — and as long as they mailed them by Jan. 31 they would have met the requirements — but that means employees might not have received it yet. If you ask your employer and they’re not able to answer your question, however, call Rev and Tax.

•Deadline to file tax returns is April 17. Extensions also should be filed by this date. Extensions are for six months.

•One of the biggest changes to this year’s tax season is that the Make Work Pay Tax Credit is no longer available. You can call Rev and Tax to see what tax credits or other changes you need to be aware of this year.

•Rev and Tax assists the elderly — ages 55 years and above — with tax filing but only for simple returns.

•Revenue and Taxation can be contacted at 635-1842/0.

TAX Q&A

Pacific Daily News readers sent in questions that were answered by local tax experts. See the questions and answers below:

Question: Can I get earned income tax credit from social security payments and retirement disability?

Answer: If I understand the question correctly, your income does not qualify for the earned income tax credit. The earned income tax credit is calculated on “earned” income. Earned income means wages, salaries, tips and other employee compensation, plus any net earnings from self-employment. It does not include social security payments or retirement benefits. — Joe Arnett, partner-tax services at Deloitte and Touche LLP.

Q: My refund was garnished last time because my husband owed the government of Guam, and I filed as “married and filing jointly.” How can I avoid this situation from happening again? Should I file this year as “married, but filing separately?”

A: The Tax Code provides a simple procedure you can follow to make sure you receive your portion of the tax refund, even if your spouse owes back taxes. This program is referred to as Injured Spouse Relief. In order to take advantage of this program, you must complete and file Form 8379, Injured Spouse Allocation, at the time you file your joint income tax return. The Department of Revenue & Taxation will use the Injured Spouse Form to determine the portion of the refund that should be allocated to you. The Department of Revenue & Taxation may then refund the appropriate funds to you and apply the remaining refund to your spouse’s back taxes. Certain conditions apply. Another alternative is for the innocent spouse to file an amended W-4 with their employer that reduces their tax withholding in an amount that equals their refund. More money is received by the taxpayer during the year in an amount that would have been refunded some time later. After all, a tax refund is not the government’s money, it is yours.– Joe Arnett, partner-tax services at Deloitte and Touche LLP.

Q: My son is 41 years old and is on permanent disability. He receives $783 monthly and was told by the Department of Revenue and Taxation not to file any more tax. Is he qualified to receive tax credit? He receives GHURA Section 8 assistance.

A: This requires additional information to provide a much more accurate response. Taxpayers who are under retirement age and receiving disability benefits (from a former employer’s plan) will have to report the income as earned income until the taxpayer reaches retirement age. So, it really depends on the type of income to determine if the taxpayer is required to file. — Arthur Murphy

Q: My son left on March 2011 for Air Force basic training, so he stayed with us for only for three months last year and took a vacation for a month on October of 2011. Can I still put him on my tax return as a dependent?

A: My guess is your son can no longer be claimed as a dependent on your personal income tax return. To be sure, review the five tests that an individual must pass to be claimed as a dependent.

First, the individual must bear a qualifying child relationship to the taxpayer (i.e. son, daughter, step children, etc.). Second, the individual must have the same principal place of abode as does the taxpayer for more than one-half of the taxable year. Third, the individual must meet the age requirements (under 19 years of age at the end of the taxable year). Fourth, the individual must not have provided more than one-half of his or her own support for the calendar year in which the taxable year of the taxpayer begins. And fifth, the individual must not file a joint return, other than a joint return filed solely as a claim for refund, with the individual’s spouse for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.

It appears tests three and four will be the most difficult to satisfy. Even if the son is still 18 at the end of 2011, the support test may be difficult to satisfy if the son has been serving with the US Air Force since March of 2011. Note that for test two, an exemption is granted for persons serving in the Armed Forces. Those days a potential dependent serves in the Armed Forces away from the principal abode are not counted. Remember, to claim a dependent as an exemption on your personal tax return all five tests must be satisfied. — Joe Arnett, partner-tax services at Deloitte and Touche LLP.

Q: My friend is 77 years old and is on a fixed income from social security. He receives $830 per month. He has a house and property (for) which he pays property tax. He lives in that house. Does he qualify for tax credit?

A: Based on the above scenario the taxpayer will not be required to file if social security benefits are his only source of income — there would be zero taxable income. However, in some cases social security recipients who elect to have federal tax withheld from their benefits and would file ONLY to claim a refund. Additional note: Every taxpayer has to meet established gross income filing requirements, which will determine whether a return is required to be filed. — Arthur Murphy, district manager and enrolled agent for H&R Block on Guam.

Q: Can I claim my brother as my dependent? My brother did not earn much last year. He is very sickly and has been staying with me in my house for more than seven years. I provide medicine, food and housing for him. My brother has no insurance and no money for medicine and hospitalization.

A: A dependent either can be a “qualifying child or qualifying relative.” In this case, your brother must satisfy four tests to be claimed as a qualifying relative:

•Relationship of member of the household– Sister, brother, or qualifying child;

•Gross income — Individual must have gross income of less than exemption amount $3,700 for 2011;

•Support — Taxpayer must provide over one-half of the support for an individual to satisfy test to be a qualifying relative; and

•Not a qualifying child — The individual must not be the qualifying child of the taxpayer or of any other taxpayer.

Based on your question, your brother meets the relationship test. However, without more information it is difficult to determine whether he satisfies the other three tests to be claimed as a your dependent.– Arthur Murphy, district manager and enrolled agent for H&R Block on Guam.

Q: I have phoned the IRS three times and cannot seem to get an answer to this question. We have been told three different things. My husband had a switch of company in April. He is a contractor for a mainland company. He has an overpayment of social security withholding. Do we file a special form? What is the form? Where do we file it? Are we owed by social security administration, Government of Guam or mainland IRS? If you could answer this so we can get our taxes filed we would appreciate it very much.

A: For residents of Guam, a refund of excess social security tax payments can be claimed on form 1040SS. This form is used primarily to report earnings from self-employment, but also can be used to claim a refund of excess social security payments. Complete the taxpayer information for the individual claiming the refund and insert the excess amount on line 7. See the instructions for line 7 to compute this amount. Attach the appropriate W-2′s and sign the return. The return is filed with the IRS Service Center in Austin, Texas. See the instructions that accompany the form. The form and instructions can be downloaded from the IRS website at www.irs.gov. — Joe Arnett, partner-tax services at Deloitte and Touche LLP

NEW YORK — Bills or bug juice?

With the economic recovery still struggling to take hold, many American Jewish families are finding they face a difficult question as deadlines for summer camp enrollment approach: Can they both pay their bills and send their kids to Jewish overnight camp?

“It’s a difficult decision,” said Shelly Zemelman, a school psychologist in Cleveland with four children. Her 16-year-old daughter, Batya, has spent four summers at Camp Stone, a modern Orthodox camp in Sugar Grove, Pa. that charges $3,500 for a four-week session. Other Jewish camps charge as much as $1,500 per week.

“It’s not a necessity like school — it’s a luxury,” Zemelman said. “If we had to send all four kids at the same time, I don’t think we could have done it.”

She said she knows several families who are considering dropping camp; one family made it work by alternating the years their children attend camp.

Jewish summer camp is not for the faint of wallet. But with new studies suggesting that the camp experience is a key component in boosting the Jewish identity of American Jews, it shouldn’t be expendable, say champions of camping.

A 2011 study “Camp Works: The Long-Term Impact of Jewish Camp,” paid for by the Foundation for Jewish Camp and conducted by Steven M. Cohen, Ron Miller, Ira Sheskin and Berna Torr, found that Jewish campers were much more likely to feel attachment to Israel, attend synagogue at least monthly, light Sabbath candles and donate to a Jewish federation than those who had not gone to Jewish summer camp. The study, which controlled for past Jewish experience, also found that camp attendance was correlated with moderate increases in the size of one’s circle of Jewish friends and the importance one ascribes to Jewish identity.

The study found that 70,000 kids attended Jewish overnight camp in 2010.

For many parents, the answer to the dilemma is in financial aid. Camp industry insiders say applications for financial aid have risen sharply since the economic crisis hit in 2008.

“Absolutely there’s been an increase in request for financial aid,” Jeremy Fingerman, CEO of the Foundation for Jewish Camp, told JTA. “There are current campers who have fallen on hard times and families that want to join camp for the first time but can’t make it an affordable choice for them.”

The 150 nonprofit camps in the FJC’s network have reported increasing scholarship allocations by 25 to 100 percent — often in addition to support offered by local foundations, federations or synagogues.

Yehuda Rothner, director of Camp Stone, said that requests for financial aid at his camp have gone up by 10 percent, but that the amount requested has gone up significantly more.

“People are asking for more money,” he said.

Over the last five years, the camp has more than doubled the yearly allocation for scholarships, from $100,000 to $220,000. There also has been a slight increase in “bad debt,” in which the camp makes accommodation for families who between the first and second payments find themselves unable to pay.

Ramah, the Conservative movement’s camping wing with eight overnight camps and three days camps, has increased scholarship giving to $4.3 million in 2011 from $3 million in 2008, according to Amy Cooper, Ramah’s national director. The Ramah scholarships, which include funds raised by local boards, synagogues, federations and foundations like the FJC, have benefited 500 families among the 6,500 attending Ramah camps each summer.

Not all aid is doled out according to financial need. Over the last four years, the FJC says its Happy Camper program has provided 30,000 financially blind grants of up to $1,000 to entice first-time campers.

“There are some families for whom the money is critical to deciding to go to Jewish camp,” Cooper said. “Our commitment is that every child who wants to go to Jewish camp can.”

Despite the weak economy, camp enrollment has continued to climb. The 150 nonprofit camps in FJC’s network have grown by 4 to 5 percent over the last four years. Fingerman attributed the increase in part to a drop-off in enrollment at for-profit Jewish camps, which tend to cost more.

Many credit the mix of scholarships and grants for boosting enrollment. Rothner said another factor may be at play: parents who are sending their children to Jewish camp instead of the Jewish day schools, which cost more.

“As day school prices increase, it is forcing a difficult situation down parent’s throats, and they’re having to make those decisions,” Rothner said.

Some camp administrators say the recession hasn’t had much of an impact on enrollment because their constituency is mostly high-income families.

Howard Salzberg, who has co-owned the for-profit Camp Modin in Maine for the last 32 years, said that enrollment at the camp — which costs $6,300 per four-week session — hasn’t suffered at all.

“People forgo other things before they won’t send their kids to camp,” he said.

For the campers themselves, how their parents pay for camp is easily forgotten once they’re there.

“I’ve never made friends like that — they were the people who have made the most impact on my life,” Batya Zemelman said.

Asked if she’d known anyone who had trouble affording camp, she paused as if she hadn’t considered the question before.

“There were a few,” she said, “but there were scholarships available.”

Click to login and JTA.org” href=”http://www.jta.org/user/login”>write a letter to the editor or sign up for the Daily Briefing.

This article was made possible by the support of readers like you. Donate to JTA now.

by The Associated Press Associated Press

Companies that drill in the Fayetteville Shale natural gas formation have announced a $130,000 donation for scholarships at the University of Arkansas Community College at Morrilton.

The members of the Fayetteville Shale Scholarship Fund awarded 57 scholarships Monday to students currently enrolled in the college’s petroleum technology program. The school says it’s the largest scholarship donation in the program’s history.

Board president Donnie Bates says graduates from the program are well-prepared as they enter the state’s natural-gas industry.

The scholarship fund was established in 2006 and has provided 313 scholarships totaling $530,000. The scholarships cover tuition, fees and books. They’re awarded to students based on academic performance and financial need.

The scholarship fund is supported by companies that work in the Fayetteville Shale play.

College Resource Center more than scholarships

2/21/2012 8:14:32 AM

College outreach specialist Ashlee Chaudoin, left, shows Susan Hall and Christopher Thompson where to find additional scholarships online in the College Resource Center in Tahlequah, Okla. Hall and Thompson are non-traditional freshmen at Northeastern State University. TODD CROW/CHEROKEE PHOENIX

By TODD CROW
Reporter

TAHLEQUAH, Okla. – Cherokee Nation’s College Resource Center offers students more than just help finding scholarships. It also offers counseling sessions, career exploration and help with filing for federal student aid.

CRC Manager Gregg Simmons said the department’s purpose is to make as many aspects of the college experience go smoother. To achieve that, CRC staff members begin working with students as early as junior high school by getting them to start thinking about what they want to do for a career.

“A lot of times we want to be what our parents are or we want to be something that we see all the time,” Simmons said. “So we’re just exposing students to the careers that are out there, not only the ones that you see every day, but the ones you don’t see very often as well, and how different degrees are applicable.”

CRC workers also know how stressful finding and applying to universities can be, so they offer the type of assistance students would receive if asking a university representative but without the school’s agenda.

“A lot of times a college recruiter will visit the students’ high school, and while giving them a lot of useful information, also had the end goal of persuading that student to attend their college or university,” Simmons said. “We don’t have that. We want them to go to a college or university, but not a specific one. So we’re able to speak to them in a different way.”

And the services provided by CRC do not end once a student enters college. Simmons said the career exploration the center provides is not limited to junior high and high school students, but is also available to college students looking for a way to use their degrees after graduation.
“We can help students that are in college, if they’re running into trouble, having problems in their classes, or having problems getting their financial aid processed,” he said. “Any of those things while they’re attending school, we can help them locate those resources at the college they’re attending.”

Simmons said it’s also easy to limit one’s thoughts about the CRC helping only traditional students who go straight from high school to college while ruling out non-traditional students. But the CRC is open to non-traditional students, too.

“We see people here all the time that are 50 or 60 years old and going back to school because what they were doing is not available to them anymore,” he said. “It doesn’t matter what age or where you are in life. You might have worked 30 years, but are now looking for something new. We can still help.”

Though the financial aspect of the CRC is strictly for CN citizens, its other services are open to anyone.
“I don’t check IDs at the door,” Simmons said. “If someone comes in here for help, we try to help them the best we can. When we go to high school and junior highs, I do not expect teachers to pull all the Indian kids out and talk to them. The information we give and the presentations we do are good for any student.”

For more information, call 918-453-5351 or email gregg-simmons@cherokee.org.

918-207-3961

For international students, studying in the United States can be a pricey endeavor. Many U.S. colleges are expensive, cash-strapped, and in demand, giving some institutions little motivation to help international students financially. And unlike their American peers, international students typically don’t qualify for federal loans to help them fund their education. 

[Read more about international student trends.] 

But while financial aid for international students tends to be very scarce, it does exist. At least 776 colleges offered some amount of financial aid to undergraduate international students for the 2010-2011 school year, according to school-reported data to U.S. News. The average award packages ranged from several hundred dollars to tens of thousands, with the highest average packages topping $50,000. 

The list below includes the 10 ranked schools that awarded the highest average financial aid packages to undergraduate international students for the 2010-2011 school year. Those schools enrolled varying numbers of students from abroad, but all awarded, on average, $47,469 or more. 

[See which universities enroll the most international students.] 

Yale University tops the list of schools that offer the most generous average aid packages to undergraduate international students, reporting that the average award in 2010-2011 was $51,044. Like Yale, all the universities on the list below are private schools. Many are national liberal arts colleges, which means they focus on undergraduate education and grant at least half of all degrees in liberal arts majors, such as English, humanities, and philosophy. Nearly all are located in the northeastern United States, in states including Connecticut, Massachusetts, and New York. 

Keep in mind that these statistics aren’t a guarantee of financial aid at a certain school. Since these awards are averaged over the number of international undergraduates enrolled, it’s possible that some students may have received much more money than their international peers at the same school. In addition, schools that are designated by U.S. News as Unranked, meaning they did not meet certain criteria required by U.S. News to be numerically ranked, were not eligible to be on this list. 

These 10 schools awarded the highest average aid packages to undergraduate international students for the 2010-2011 school year:

School name (State)
Average aid awarded to international undergraduates
Number of international undergraduates enrolled
U.S. News rank & category
Yale University (CT)
$51,044
348
3, National Universities
Wesleyan University (CT)
$50,743
84
12, National Liberal Arts Colleges
Skidmore College (NY)
$50,000
56
49, National Liberal Arts Colleges
Amherst College (MA)
$49,010
146
2, National Liberal Arts Colleges
Trinity College (CT)
$48,999
119
37, National Liberal Arts Colleges
Gettysburg College (PA)
$48,908
43
47, National Liberal Arts Colleges
University of Chicago
$48,436
63
5, National Universities
Williams College (MA)
$47,713
128
1, National Liberal Arts Colleges
Vassar College (NY)
$47,623
122
14, National Liberal Arts Colleges
Colby College (ME)
$47,469
94
21, National Liberal Arts Colleges

Don’t see your school in the top 10? Access the U.S. News College Compass to see all schools that offer financial aid to international students, complete rankings, and much more. 

U.S. News surveyed more than 1,800 colleges and universities for our 2011 survey of undergraduate programs. Schools self-reported a myriad of data regarding their academic programs and the makeup of their student body, among other areas, making U.S. News’s data the most accurate and detailed collection of college facts and figures of its kind. While the data comes from the schools themselves, these lists have no influence over U.S. News’s rankings of Best Colleges or Best Graduate Schools.

Penn’s Undergraduate Tuition Increase for 2012-2013: 3.9%

February 21, 2012, Volume 58, No. 23

The University of Pennsylvania reaffirmed its commitment to an all-grant, no-loan financial-aid program at last Friday’s meeting of the Board of Trustees as they authorized a $181 million financial-aid budget for 2012-2013 while increasing total undergraduate charges by 3.9%, the second lowest in 44 years.

Increasing access for undergraduate students is one of Penn President Amy Gutmann’s top priorities, and this year’s financial-aid budget reflects an increase of $13 million, or 7.7%, over 2011-2012. Since Dr. Gutmann took office in 2004, Penn’s financial-aid budget has grown by 129%, averaging 9.9% per year, more than twice the average annual growth in total charges.  

“We want to enable students to make career and life decisions based on their interests, talents, and passion—not on whether they’ll make enough money to pay off their student debt,” Dr. Gutmann said. “We promise all admitted students who qualify for financial aid that they will be able to attend without loans. Especially in these challenging economic times, we want prospective students and their families to know that Penn is affordable to them.”

As a result of Penn’s innovative financial-aid program, the average net cost for aided students to attend Penn today is less than it was in 2004.

Penn has substituted grants for loans for all aid-eligible undergraduates since 2009. Next year, the average grant for students is estimated at $38,250. In 2011-2012, the number of undergraduates receiving financial aid increased by 2.5%, and University aid expenditures grew by 8.7%.  

Total undergraduate charges for 2012-2013 —tuition, fees and room and board—will increase by 3.9%. Undergraduate tuition will increase to $39,088 from $37,620; room and board will increase to $12,368 from $11,878; and fees will increase to $4,650 from $4,478. Tuition and fees cover 70% of the direct cost of delivering a Penn education. This is the fourth consecutive year that Penn has kept its tuition growth under 4.0%.

This year, almost 45% of Penn’s undergraduate students received need-based grants from the University. Most undergraduates from families with incomes of less than $175,000 are receiving grant assistance, and the typical student with family income of less than $40,000 receives grant aid that covers full tuition, room and board.

Over the past several years, as increasing numbers of students have required financial assistance, Penn has maintained its commitment to meeting full need with no-loan packages.

Penn is one of fewer than 50 private institutions in the United States that admit academically qualified students without regard to their families’ ability to pay while also meeting the determined full need of all undergraduates. Of the other colleges and universities with no-loan financial-aid policies for undergraduates, Penn has the largest undergraduate enrollment at 10,300.

Increasing educational access remains a priority of Penn’s historic $3.5 billion Making History campaign, which has raised more than $3.5 billion to date. The campaign includes a fundraising goal of $350 million for undergraduate student aid and another $323 million for graduate and professional student aid.

Additional information on undergraduate financial aid at Penn is available at www.sfs.upenn.edu/paying/paying-pro.htm

The University of KwaZulu-Natal’s Westville campus has extended the closing date for the registration of students who are struggling financially.

“Returning students who are on financial aid appeals will be expected to register as soon as their appeals have been finalised and no later than February 29,” university spokesperson Nomonde Mbadi said on Tuesday.

Students eligible to apply to the registration appeals committee were those studying towards a qualification.

“They are eligible to register if they have not been academically excluded and have a family income less than a threshold of R180 000 per annum,” said Mbadi.

Other requirements included students who owed less than R4 000, students who owed money and had applied for financial aid for the first time and students who owed money but were on financial probation.

Mbadi said students who submitted appeals to the registration appeals committee would be contacted to consult with the staff of student fees offices.

“Regarding the issue of the selection of residence assistants, a meeting will be held with manager of the student residence affairs Mr Themba Khumalo to find an amicable solution to the challenge,” she said.

Mbadi said first year students who had applied to the central applications office for financial aid and who qualified for assistance would be cleared to register.

Students at the university protested last Monday and Tuesday because they wanted funding to be made available to over 1 000 students. They also demanded the university to provide housing for more students.

The students went on the rampage on Tuesday after being told about a court interdict against the protests of the past weeks.

Police spokesperson Colonel Vincent Mdunge said students barricaded roads with burning tyres and rocks, preventing vehicles from entering or leaving the institution.

Four students were arrested for malicious damage to property and three students were injured.

Mbadi said the strike at the university had been called off and normal academic programmes had resumed. — Sapa

(MoneyWatch) 

A few weeks ago, I outlined several financial moves to make now that could help increase the financial aid for your student this year.

Since most folks need financial aid for college costs each year, it can also pay to think about financial planning now: Doing so can increase financial aid when you complete and file the FAFSA, or federal financial aid application, in future years.

The concepts here are simple enough: use financial strategies that can reduce your base year income and reduce includable assets. If your base year income is lower, you could be required to make a lower expected family contribution towards college costs and therefore receive more financial aid. In regards to includable assets, an important concept to keep in mind is that depleting assets held by the student first can help to increase financial aid in later years. That’s because assets in accounts owned by a parent for a dependent student are reported on the free application for Federal Student Aid (FAFSA) as a parental asset. Parental assets are assessed at a maximum 5.64% rate in determining the student’s expected family contribution. For assets owned by the student, a higher percentage of assets, 20%, is required to be used towards college costs.

But making financial moves takes planning so you’ll need to think ahead, as making a few well-timed financial moves can help to decrease your expected family contribution and increase your student’s eligibility for some federal financial aid programs such as federal loans and work study programs.

Financial strategies to make this year that could increase financial aid when you file the FAFSA in the following years can include:

Maximize retirement plan contributions. Since assets in retirement accounts are not includable, making the maximum contributions to 401(k) accounts this year and using your savings outside retirement accounts to pay for living expenses is a viable strategy to reduce includable income and assets.

Spend student’s assets first. If you feel that the student’s assets should be used towards education costs (which was probably the purpose of these savings in the first place) then use up all of the student’s assets towards college costs this year, before using any of the parent’s assets.

Minimize taxable income. Think twice before selling investments in taxable accounts. Realized capital gains on investment sales are included income. Avoid taking taxable withdrawals from retirement accounts and delay exercising stock options. Also, if your employer offers one, use a nonqualified deferred compensation plan to defer any bonus income until a later year, if possible.

Delay gifts to student. Ask family members to hold off on making monetary gifts directly to the student. Instead, make gifts after graduation, which the student can then use towards paying off student loans, etc.

Parents and their students will find that the financial aid process is full of complexity and opportunity. Reading guides like this will help you and your student make the most of it.

(MoneyWatch) 

A few weeks ago, I outlined several financial moves to make now that could help increase the financial aid for your student this year.

Since most folks need financial aid for college costs each year, it can also pay to think about financial planning now: Doing so can increase financial aid when you complete and file the FAFSA, or federal financial aid application, in future years.

The concepts here are simple enough: use financial strategies that can reduce your base year income and reduce includable assets. If your base year income is lower, you could be required to make a lower expected family contribution towards college costs and therefore receive more financial aid. In regards to includable assets, an important concept to keep in mind is that depleting assets held by the student first can help to increase financial aid in later years. That’s because assets in accounts owned by a parent for a dependent student are reported on the free application for Federal Student Aid (FAFSA) as a parental asset. Parental assets are assessed at a maximum 5.64% rate in determining the student’s expected family contribution. For assets owned by the student, a higher percentage of assets, 20%, is required to be used towards college costs.

But making financial moves takes planning so you’ll need to think ahead, as making a few well-timed financial moves can help to decrease your expected family contribution and increase your student’s eligibility for some federal financial aid programs such as federal loans and work study programs.

Financial strategies to make this year that could increase financial aid when you file the FAFSA in the following years can include:

Maximize retirement plan contributions. Since assets in retirement accounts are not includable, making the maximum contributions to 401(k) accounts this year and using your savings outside retirement accounts to pay for living expenses is a viable strategy to reduce includable income and assets.

Spend student’s assets first. If you feel that the student’s assets should be used towards education costs (which was probably the purpose of these savings in the first place) then use up all of the student’s assets towards college costs this year, before using any of the parent’s assets.

Minimize taxable income. Think twice before selling investments in taxable accounts. Realized capital gains on investment sales are included income. Avoid taking taxable withdrawals from retirement accounts and delay exercising stock options. Also, if your employer offers one, use a nonqualified deferred compensation plan to defer any bonus income until a later year, if possible.

Delay gifts to student. Ask family members to hold off on making monetary gifts directly to the student. Instead, make gifts after graduation, which the student can then use towards paying off student loans, etc.

Parents and their students will find that the financial aid process is full of complexity and opportunity. Reading guides like this will help you and your student make the most of it.

Frazer Memorial United Methodist Church will be the host site for a free workshop to help students and their families navigate the complexities of applying for financial aid.

The FAFSA, or Free Application for Federal Student Aid, is used to determine financial aid and can be an important part of applying to college — and a vexing one.

“The financial aid form can be confusing. We want to make sure we provide all the assistance necessary. It’s very important people realize college is affordable,” said Kanesha McCollum, an EMERGE Torchbearers Leadership Class III member who is helping to organize the workshop.

The event is part of an ongoing effort by the leadership group to assist Montgomery Public Schools. The group created the Young Professional Advisory Board for Montgomery Public Schools, which is hosting the workshop along with the school system.

The group has already spent time in the school system’s traditional high schools talking students through FAFSA information, explaining to them how the forms work and what they’ll need to complete them. But that was earlier this school year and the FAFSA application process started in January.

“Now is actually time to do the forms,” McCollum said, adding that while the sessions before let students know what was gong to happen, but now it’s time to get parents involved and get more details.

The workshop will be held at 5:30 p.m. Feb. 28 at Frazer in the church’s main fellowship hall.

McCollum said there will be guidance counselors on hand to assist and there will be a PowerPoint presentation followed by a question and answer period.

“At this workshop, they will receive pointers on how to fill out FAFSA forms,” she said, adding they will also find out how to research other scholarship offers.

The workshop also plans to provide a list of available scholarships.

“If you need money, just come to the workshop,” McCollum said. “It’s just a very good opportunity to pull everyone into a neutral location and let them know the young professionals of Montgomery are concerned and we want to help them apply for aid.”