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IRS online tool helps with FAFSA

By Kay Bell · Bankrate.com
Thursday, August 16, 2012
Posted: 6 pm ET

Classes across the country are about to start again. For a lot of older students, that means writing big tuition checks to colleges and universities.

To help cover the high costs of higher education, many kids and their parents take advantage of education tax credits, deductions and savings plans.

They also look into scholarships and other types of financial aid. Part of that process includes filling out the Free Application for Federal Student Aid, also referred to in government and education publications and websites as the FAFSA.

This document is used by the U.S. Department of Education to determine just how much money a student or his or her family will be expected to contribute toward college. Federal grant and loan awards are based on the FAFSA figures. Similarly, most colleges and universities rely on the form to determine a student's eligibility for the schools' financial aid programs.

And like most government documents, it's a royal pain to complete (though it's gotten a bit easier in recent years). But you've now got some help from an unlikely source -- the Internal Revenue Service.

FAFSA asks for data on income, assets and other household information. You can access the form's required income and other tax return information via the IRS' new data retrieval tool. It automatically transfers the tax data onto the federal financial aid form.

This can save you and your family some time that could be better spent on things such as deciding how to furnish your new dorm room.

To use the IRS online data option when filling out FAFSA's eligibility criteria section you'll need:

  • A filed 2011 tax return.
  • A valid Social Security number.
  • A Federal Student Aid PIN (if you don't have one, you can get one through the FAFSA application process).
  • The same marital status as of Dec. 31, 2011.

If you have already submitted a FAFSA and would like to use the IRS tool, just  click "Start Here, login" and start a correction. Once in the FAFSA, navigate to the "Finances" section, where the option to use the tool displays for eligible students and parents.

If you can't use the online data tool and don't have the tax information on hand, then you have to get an official transcript from the IRS to verify your FAFSA information. You can order tax return or tax account transcripts at the IRS website or by calling the toll-free transcript line at (800) 908-9946.

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2 Comments
haha
August 18, 2012 at 3:31 am

Soon for borrowers looking into doing the income based repayment plan there will be system similar to this in terms of getting the tax information. Supposed to be unveiled by the end of the year. Currently borrowers must complete a paper application and paper copy of their taxes. This will make it even more accessible for borrowers that need this program the most