FAFSA woes. Taxes woes. Talking through what I need to do.

[dirty ethel rackham]

I should be an old pro at this right now, but I'm kind of confused at what to do.  Pardon my muddled post here.  Trying to get my thoughts together. 

 

As some of you know, my 19yo had to take a leave from school back in November due to mental health issues.  This kid is possibly planning on going back Spring term (March) or next fall.  However, this kid has not been compliant with the recovery plans (appears to be med-compliant, but not much else) and does not appear ready to go back to school, despite their plans. (It doesn't help that they hate it here and have no friends here.)  However, I guess I need to fill out FAFSA just in case.  Right? 

 

Taxes are complicated this year because dh's father died and the estate is not fully settled.  There were some dispersements.  The taxes on the estate are not completed, which means that we won't have a full picture for our taxes.  So, do I just do our taxes now and file an amended return later?  It looks like a large windfall on paper which will artificially inflate the income this year. 

 

Another sticky point about student loans ... we have been very judicious about student loans.  We needed them for cash flow, but only allowed our kids to take out subsidized loans and for small amounts.  But, since 19 yo is on leave and not in school right now, they received a letter about paying back the loans after the grace period.  If they return for Spring Term, the point wil be moot because they will return before the grace period is up.  If they wait until September, they will have to have started the process because that will be over 9 months.  Any advice here?

 

 

[retiredHSmom]

My daughter took a fall semester off too.  Between the summer and fall her grace period on her student loans ended and they went into repayment the same month that she began classes again. I called the loan servicer and found that we did indeed to make that one payment and that as soon as she the add/drop period ended it would be official that she was a student again and her loans would be in deferment again.  We also learned that her six-month grace period for those loans was used up and that when she graduated there would be no additional grace period on those specific loans and she would need to begin to make payments immediately.

[Carol in Cal.]

Covered better downthread.

Edited February 1, 2016 by Carol in Cal.

[G5052]

Taxes are complicated this year because dh's father died and the estate is not fully settled.  There were some dispersements.  The taxes on the estate are not completed, which means that we won't have a full picture for our taxes.  So, do I just do our taxes now and file an amended return later?  It looks like a large windfall on paper which will artificially inflate the income this year. 

 

I'm in this world too. It's actually my fifth time through, but this one could be a reality show. Seriously. So many twists, turns, and multiple players.

 

Sorry if I'm repeating stuff you already know.

 

If the $ you got from the estate was from bank accounts, IRA's, etc. where DH was the beneficiary, the only income you claim is any increase in the value from the date FIL died. Usually the institution will provide this information for you.

 

You don't owe on life insurance proceeds where DH was the beneficiary. It's not considered income.

 

If the estate itself did a distribution from the estate's funds, you don't owe on that as income as long as it was less than $5,430,00.00. If there were no distributions from the estate, you don't owe until there is.

 

So maybe better than you expected? Don't get me started on mine. I've hired a CPA this year. It's utterly wacko.

Edited February 1, 2016 by G5052

[MerryAtHope]

Another sticky point about student loans ... we have been very judicious about student loans.  We needed them for cash flow, but only allowed our kids to take out subsidized loans and for small amounts.  But, since 19 yo is on leave and not in school right now, they received a letter about paying back the loans after the grace period.  If they return for Spring Term, the point wil be moot because they will return before the grace period is up.  If they wait until September, they will have to have started the process because that will be over 9 months.  Any advice here?

 

 

My daughter took a fall semester off too.  Between the summer and fall her grace period on her student loans ended and they went into repayment the same month that she began classes again. I called the loan servicer and found that we did indeed to make that one payment and that as soon as she the add/drop period ended it would be official that she was a student again and her loans would be in deferment again.  We also learned that her six-month grace period for those loans was used up and that when she graduated there would be no additional grace period on those specific loans and she would need to begin to make payments immediately.

 

This is how it was for me years ago too. I took a year off in the middle--had to start paying on the loans, then they deferred again when I started back up but there was no longer a grace period after that.