FAFSA Questions: When You Are Separated Should You File Separate Taxes?

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Many institutions of higher learning such as colleges, universities, community colleges, vocational schools and technical institutes offer financial aid for qualified students to help offset the high cost of education. Many of these institutions require students to complete the Free Application for Federal Student Aid, commonly referred to as FAFSA, as a part of their financial aid application. Some of the information required by the FAFSA is taken directly from federal income tax returns filed by both the student and her parents.

Parents Filing Status

  • There are five filing statuses that parents of students may claim when they file their federal income taxes. These statuses include single, married filing jointly, married filing separately, head of household, or qualifying widow(er). The parent's or parents' marital status as of the last day of the calendar year determines marital status for tax purposes for the entire year. If the parents were legally married as of the last day of the year, the Internal Revenue Service considers them to have been married for the entire year. If the parents were never married, or they were legally divorced as of the last day of the year, the IRS considers them single for the entire year. If the parents were separated but their divorce was not final as of the last day of the year, the IRS still considers them married.

Joint or Separate Returns

  • Separated parents of a student who files a FAFSA application may file their federal income taxes jointly or separately. The IRS recommends taxpayers file using the status that will result in the lowest overall tax obligation. This is usually the married filing jointly filing status. Parents who are separated, but not legally divorced have the option of filing separate returns. Separate returns will allow each spouse to only be responsible for their individual taxes, and may result in a lower tax obligation. If one spouse files a separate return, both spouses must file separate returns.

Married but Separated Students

  • Students who are married are usually considered to be independent of their parents. The rules for filing federal income taxes for independent students are the same as they are for parents. If the student was legally married as of the last day of the year the IRS considers her to have been married for the entire year. She would have the option of filing her taxes as either married filing jointly or married filing separately. If the student was separated, but not legally divorced, she would still be considered married for income tax purposes by the Internal Revenue Service. She would still have the option of filing her taxes as married filing jointly or married filing separately. The IRS recommends choosing the filing status that would provide the taxpayer with the lowest tax obligation, which is usually the married filing jointly filing status. The student may choose the married filing separately status if she wishes to only be responsible for her own taxes, or if it provides a lower tax obligation. Both spouses must file using the same filing status.

Considerations

  • Some questions on the FAFSA are relevant to the student's marital status as of the day she completes the application, not the last day of the year. A married student who is separated but not legally divorced as of the day she completes the application must answer "Yes" to the FAFSA question, "As of today, are you married?" The same rule applies to the student's parents.

References

  • Photo Credit Jupiterimages/Comstock/Getty Images
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