16 Mar How Social Security counts on the FAFSA
Q. Will my Social Security be counted against us as income on FAFSA?
A. We’re glad to see you’re taking a look at what will impact the Free Application for Federal Student Aid (FAFSA).
Here’s how it works for Social Security.
“Taxable Social Security benefits are reportable on the Free Application for Federal Student Aid (FAFSA) but your non-taxable Social Security benefits are not reportable,” said Brian Power, a certified financial planner with Gateway Advisory, LLC in Westfield.
He said the base amount of modified adjusted gross income (MAGI) causing Social Security benefits to be taxable starts at $32,000.
“Generally, your modified adjusted gross income (MAGI) is the total of your household’s adjusted gross income (AGI) plus any tax-exempt interest income you may have,” he said. “Your AGI is your total gross income minus specific deductions.”
Power said at $32,000 MAGI, 50 percent of your Social Security income is taxable. From $32,001 to $44,000 MAGI, the taxable amount of your Social Security income is on an increasing sliding scale until it reaches 85 percent taxable.
If your MAGI is higher than $44,000, your Social Security benefit will max out as 85 percent taxable, he said.
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This post was first published in March 2018.NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.