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claiming a dependent & impact on financial aid

By Terry Savage on March 11, 2023 | College Savings / Student Loans

Good morning. My daughter turns 17 in April 2023 and is a senior in Fall of 2023. I am divorced from her mother and claim my daughter annually. My daughter does have an income and will file for 2022, approx $6500 in earnings. I work FT and had an AGI of 53k for 2022. Question – in your opinion, is it best to allow my daughter to claim herself in 2023 to improve the financial aid application/picture? Thank you.

Terry Says

No, she can’t do that because someone else provides more than 50% of her support. But work with your tax preparer to make sure the appropriate ‘kiddy tax’ is paid on your return.
AND, if she keeps the money in a savings account in her name (custodial account), it will weigh 7x more heavily against you in the aid formula.
AND, did you know that your ex-spouse has to file the FAFSA application as well??!! Speak with your high school guidance officer and check out the rules at www.Finaid.org.

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